By Mark Pender

NEW YORK (MNI) – MNI’s U.S. capital goods index rose 2-1/2 points
in the Dec. 17 period to 72.9 indicating accelerating year-on-year
growth, according to Market News International’s weekly survey.

Sales are an on-year +10.5% with income at +21%. Sample size in the
period is 153 companies.

MNI’s data point to strength for nondefense capital goods readings
in Thursday’s durable goods report for November. A rise in shipments is
needed to offset a slip in October.

Industrial clothing maker Lakeland Industries (LAKE) said its
domestic market has declined “precipitously” over the past few years due
to “outsourcing trends and the exporting of “dirty jobs” to nations with
lower costs bases. Two thirds of the company’s nearly 20% growth rate is
in its international business.

Asian markets are developing faster than Williams Controls (WMCO)
expected, now making up one quarter of the company’s business. The
company, which makes heavy truck throttles, is in the process of opening
a plant in India.

Apogee (APOG) is counting on an acquisition of a Brazilian
fabricator to enter Latin America’s architectural glass market. The
company reports price contraction across its architectural business yet,
in anticipation of growth, is holding onto capacity and labor.

Apogee describes the non-residential market as flat as do others
including steel maker Nucor (NUE) which uses the same description for
the residential market. Nucor expects to report a fourth-quarter loss.

Plastics sheeting maker Spartech (SEH), posting mid single digit
gains, sees nothing more than slow recovery ahead. As others, the
company cites input-price volatility as a special challenge.

Whether 787 delivery is pushed back again is a major risk to the
capital goods sector. Hexcel (HXL) is uncertain about the 787. Still the
composite materials maker is upbeat pegging 2011 sales growth in the
high single digits, down only slightly from a low double-digit trend.

Heico (HEI), which makes aircraft parts, reports continuing
improvement in product demand which it sees extending through next year.
The company expects to benefit from capacity increases in the commercial
airline industry.

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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