By Mark Pender
NEW YORK (MNI) – MNI’s U.S. capital goods index rose nearly four
points to 63.9 in the July 16 period to indicate no slowing in the
sector’s sharp acceleration, according to the results of Market News
International’s weekly survey.
The four-week average rose one tenth to 62.8 in confirmation of the
strength while the 12-week average, up four tenths to 61.0, continues on
its uninterrupted seven-month winning streak.
Sales are a year-on-year +12.0% with income at +34%. Sample size is
72 companies.
Asian-centered demand for electronics is leading the sector. The
electronics group showed extreme deceleration during the recession and
has so far this year shown the reverse.
Backlogs are a big plus for the sample. Citing backlogs, Fairchild
Semiconductor raised third-quarter sales guidance to a year-on-year
+25%. The power chip maker describes sales as robust.
High-performance electronics maker Frequency Electronics (FEIM)
sees the chance for a rise in satellite and defense orders, citing
strong proposal activity and noting that several major space programs
have been delayed for more than a year.
Fabrications maker Valmont Industries (VMI) reports a downturn in
orders blaming a North American slowdown in government spending on
infrastructure. It also cites global weakness in commercial and
residential construction and even weaker demand for wireless
communication structures.
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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