By Mark Pender

NEW YORK (MNI) – MNI’s U.S. capital goods index jumped 3.2 points
in the Oct. 28 period to 71.8, further above 50 to indicate very strong
year-on-year business conditions and offering an early signal of
sequential acceleration, according to the results of Market News
International’s weekly survey released Monday.

Year-on-year sales are +11.1%, up 2.3 percentage points in the week
in a strong move which if confirmed in subsequent weeks would point to
fourth-quarter acceleration for nondefense capital goods shipments.

The sample’s currency effect is in-trend, giving a +4% boost to
export sales. Income is at +11.0% for a three-point gain in the period.
Sample size in the period is 434 companies.

Backlogs are strong at offroad wheel maker Titan (TWI) which is
increasing its pace of hiring. The company reports wide strength across
its businesses and notes that all customers contacted are forecasting
increased orders for next year.

Backlogs are strong at the same time that demand is robust, a
combination that has oscilloscope maker LeCroy (LCRY) raising guidance.

Citing increasing Boeing 787 production, Precision Castparts (PCP)
is starting to hire and is pulling forward certain capital investments
by a full year.

Crane & lift maker Terex (TEX) is optimistic about the fourth
quarter and about 2012 as a whole, citing earlier-than-normal
discussions with customers about buying more equipment. Citing its own
price increases, the company sees profit growth exceeding sales growth.

Citing early indications from Thailand, capacitor maker Kemet (KMT)
believes the flood disaster may have taken out a substantial portion of
capacitor supply. The company is gearing up its operations to fill the
gap.

Pointing to weakness in Western Europe and order push outs to the
first quarter, industrial services provider Harsco (HSC) sees a mid
single digit sequential sales decline in the fourth quarter along with
sub double digit year-on-year growth.

Natus Medical (BABY) warns that the size of customer orders has
scaled down and that some orders are being delayed. But the medical
equipment maker is hopeful that the orders haven’t been lost but only
delayed as they were when customers last scaled back during late 2008
and early 2009.

A fourth-quarter sequential contraction of 5% to 10% is the call
from chip maker Micrel (MCRL) which directly ties the downturn in
semiconductor demand to overall weakness in the global economy
particularly in the U.S. and China.

The delay in capacity additions in the electronics sector could
last several quarters, according to electronics machinery maker Electro
Scientific (ESIO) which sees a fourth-quarter pivot lower for its own
sales from positive sequential and year-on-year rates to negative rates.

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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