By Mark Pender
NEW YORK (MNI) – MNI’s U.S. capital goods indicator fell 1.2 points
in the Nov. 16 period to 38.8, further below 50 to indicate deepening
contraction in year-on-year business activity, according to the results
of MNI’s weekly survey released Monday.
Year-on-year sales growth for the period’s 479-company sample is
zero with income at -2.0%. Currency effects are subtracting three
percentage points from export sales.
Ex-aircraft is a bit weaker yet, at a diffusion reading of 37.8 for
a one point decline from the prior week. Sales are -0.6% with income at
-2.0%.
Quarter-to-quarter guidance from both the total sample and the
ex-aircraft group point to zero growth for fourth quarter sales.
Not all commentary is negative with some reporting solid growth and
some forecasting continuing strength into next year.
But many say customers are tightly controlling inventories and are
being conservative in their order patterns. Some report lengthening
sales cycles.
Successes are often attributed to new products, not to global macro
conditions which are not boosting capital-equipment activity.
Telecom infrastructure and alternative energy are areas of weakness
as is electronics machinery. Oil & gas is an area of strength.
Editor’s Note: MNI compiles its capital goods indicator based on a
weekly sample of company news and data.
** MNI New York Bureau: 212-669-6430 **
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