By Mark Pender

NEW YORK (MNI) – MNI’s U.S. capital goods index edged three tenths
higher to a very strong 75.7 in the March 25 period, above 50 to
indicate year-on-year growth and above the top end of trend to indicate
accelerating growth, according to the results of Market News
International’s weekly survey released Monday.

The pass through of high input costs is giving a small but
increasing boost to sales which are a year-on-year +15.0% for the
highest rate in five months. More than 60% of the sample are posting a
sales increase of 10% or more.

Income is strong at +27%. Sample size in the period is 210
companies.

Last week’s durable goods report shows a 1.1% February gain for
nondefense capital goods shipments which got a slow first-quarter start
following December’s big year-end push.

Still, if March shipments do no better than match February,
first-quarter shipments would show no change from the fourth quarter and
would be up 8.3% year-on-year.

MNI’s company data, based on guidance and trends, point to rising
growth in the first quarter, in the low single digits for the
quarter-to-quarter comparison and the low double digits for
year-on-year.

The quarter-to-quarter target would simply need a small gain for
March but the year-on-year target would need a very sizable 4.7% jump in
Commerce’s data.

Early warnings related to Japan are rising but are still vague as
companies assess the crisis.

Year-on-year currency effects are swinging to a small positive
effect from a nine-month stretch of low single-digit negative effects.

Sealants & adhesives maker HB Fuller (FUL) sees a 1% positive
effect for its May quarter vs. a 1% negative effect in its February
quarter.

Citing orders so far this month as well as its visible pipeline,
chip-machinery maker FSI International (FSI) sees a 70% year-on-year
gain for new orders in its May quarter. February-quarter sales were up
62% to $31 million.

Cement maker Texas Industries (TXI) warns that its February quarter
was obscured by weather effects and that it will have to wait for its
April quarter to get a gauge on business conditions.

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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