By Mark Pender

NEW YORK (MNI) – MNI’s U.S. capital goods index firmed nearly 2-1/2
points in the June 11 period to 62.8, a new cycle best and indicating
significant and accelerating expansion underway in the industrial
sector, according to the results of Market News International’s weekly
survey.

Sales are at a year-on-year +11.2% with the four-week average, up
one percentage point to +10.1%, continuing to build out a steep
ascending slope. Sample size is 97 companies.

Foreign exchange effects are turning lower for the sample, from a
year-on-year +3.0% for export sales in the first quarter to what looks
like a low single digit negative effect for the second quarter.

Last week’s international trade data showed little change in April
capital-goods exports. A look back over the last year shows the effects
of currency on exports as negative effects in the spring last year held
down exports to less than 45% of total capital-goods shipments, a
proportion that is up to more than 49% in April data. But April looks to
be the peak for this proportion given the dollar’s rise, up 5% on the
dollar index from early May.

NCI Building Systems (NCS), which makes metal products for
non-residential construction, is reporting improving conditions with its
metal coil unit ending a long run of very weak results. The company
reported consistent improvement through its May 2 quarter, saying it’s
gaining market share in a still contracting market.

C&D Technologies (CHP), which makes power supplies, has been hit by
the slowdown in data-center construction. But it reports indications of
gradual improvement and is upbeat, noting lower lead prices and
continued growth in Asia.

Medical-equipment maker Cantel Medical (CMN) continues to be hurt
by what it describes as a “deferred rate of growth” for
capital-equipment sales, which is being offset in part by a rise in
demand for consumables.

Capital-goods data will be a highlight of Wednesday’s industrial
production report where the business equipment is very likely to extend
gains.

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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