By Mark Pender

NEW YORK (MNI) – MNI’s U.S. capital goods index came in at 69.1 in
the Jan. 7 period, down nearly two points but still indicating strong
year-on-year growth, according to Market News International’s weekly
survey released Monday.

But indications on year-on-year sales growth, at +11.5% in the
period, are to beginning to slow toward the high single digits. Currency
effects on export sales are steady and mild at minus 1% to 2%.

Income growth for the period’s 131-company sample is steady and
strong at just over 20%.

Quarter-to-quarter indications point to no significant change as do
month-to-month indications for December.

This sample is pointing to a dip for the business equipment index
of the industrial production report, data to be posted Friday. The index
has been up for nine straight months.

For Thursday’s U.S. trade report, a fractional slip in November
total capital goods shipments to $73.8 billion points to no better than
flat results for capital goods exports.

Uniform provider UniFirst (UNF) is reporting slightly accelerating
on-year growth in the mid single digits: “Although overall unemployment
rates remain high, we are encouraged by the modest improvements we are
seeing in economic activity and hiring across our customer base.”

Zep Inc. (ZEP), which makes industrial cleaning solutions, warns
that its industrial and institutional markets, especially manufacturers,
schools, and government customers, are still getting hurt by high
unemployment and reduced government spending.

Electrical equipment maker AZZ Inc. (AZZ) said utility spending
needs to increase before it sees improvement in its electrical &
industrial business.

Medical equipment maker Immocur (BLUD) continues to report flat
on-year results: “We continue to see weakness in the U.S. market due to
the macroeconomic environment, which is impacting both our reagent
revenue and instrument orders.”

Fabricator Worthington Steel (WOR) said demand is low in the still
slow-to-recover nonresidential market. The company is shifting focus to
mid-rise buildings in emerging markets.

On-year growth at MSC Industrial Direct (MSM) is over 20%,
reflecting what the industrial supplier describes as “the resurgence of
the U.S. manufacturing base.” On the government side, the company
reports slowing demand tied to tightening budgets.

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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