By Mark Pender
NEW YORK (MNI) – MNI’s U.S. capital goods index rose 3.3 points in
the Sept. 9 period to 67.1, well above 50 to indicate solid growth in
year-on-year business conditions, according to the results of Market
News International’s weekly survey released Monday.
But the rise in the assessment of business conditions is not
confirmed by sales or income data. Sales fell back to a year-on-year
+9.4% for the first single digit reading since June last year.
Income is steady at a very thin +4% for the lowest reading since
the first quarter last year. Sample size in the latest period is 225
companies.
Favorable currency exchange is a major plus for the sample. The
competitive dollar is adding a year-on-year 4% to the sample’s export
sales.
Currency translation added 8.8% to July-quarter sales at industrial
filter maker Pall which reported a total sales gain of 15.0%. But the
company isn’t happy with its performance, saying the quarter marked a
disappointing finish to an otherwise good fiscal year.
Contraction is definitely appearing in the electronics group, the
result of weak consumer demand. Power chip maker Fairchild Semiconductor
(FCS) had been expecting to post a small sequential gain and a
respectable year-on-year gain for the third quarter but now sees
declines in both. The company notes weakness in Asia and is checking
inventories.
Improvements in the construction industry are a positive for Titan
Machinery (TITN) whose agricultural markets, boosted by favorable crop
conditions and tightening global supplies, remain strong. The
Midwest-based equipment distributor is raising guidance.
Editor’s Note: MNI compiles its capital goods index based on a
weekly sample of company news and data.
** Market News International New York Newsroom: 212-669-6430 **
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