By Mark Pender

NEW YORK (MNI) – MNI’s U.S. capital goods index jumped more than
3-1/2 points in the Sept. 3 period to a recovery best and nearly
four-year high of 74.4 to indicate robust conditions in the industrial
sector, according to the results of Market News International’s weekly
survey.

Early September is usually soft for MNI’s four-week rolling sample.
The current sample, going out to Aug. 9, picks up the lagging and what
are often the most disappointing outlooks of the Q2 earnings season. The
most recent couple of weeks include companies with July quarters and
companies announcing September-quarter warnings which so far have been
few.

Sales are at a year-on-year +19.4% for the strongest reading in
more than six years. Income is at +57% for the strongest reading in the
nearly three years that this category has been tracked.

Sample size is on the small side at 125 companies but prior
results, based on sample sizes of more than 500 as recently as three
weeks ago, have been nearly as strong.

A close tracking of company data and guidance, which this report is
based on, points to significant gains for capital goods output in the
months ahead.

Industrial-filter maker Donaldson (DCI) sees rising sales ahead for
equipment makers that serve construction and mining and a smaller rise
for farm-equipment makers. The company sees improving build rates for
heavy and medium trucks.

After suffering a long run of contraction, orders and sales at
printing-equipment maker Baldwin (BLD) have stabilized.

Harsco (HSC) announced rail-equipment orders from Bangladesh and
Liberia as well as several domestic orders.

New orders at mining machinery maker Joy Global (JOYG) slowed a
sequential 0.7% in its July quarter, though the year-on-year rate rose
to +51% from +43%. Lead times are long in the capital goods group,
evident by an 11% year-on-year contraction for the company’s sales.

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 **

[TOPICS: MDUCG$,MT$$$$,M$U$$$,M$UEQ$,MAUDS$]