Create a free Manufacturing.net account to continue

Report: U.S. Manufacturing Feeling Economic Strain

Manufacturers Alliance/MAPI says that while manufacturing in the U.S. is clearly slowing, global growth will help offset it.

ARLINGTON, Va. -- Manufacturing is showing signs of strain, which is to be expected in times of an economic slowdown, notes the Manufacturers Alliance/MAPI.
 
Its March 2008 composite index fell to 57 from 64 reported in December 2007. A reading above 50 indicates overall manufacturing activity is expected to increase over the next three to six months. However, the index measures the direction of change, not the absolute strength of activity in manufacturing.
 
The U.S. investment index, which asks executives about their expectations regarding capital investment in 2008 compared to 2007, fell to 62 percent in March 2008 from 74 percent in December 2007.
 
The backlogs index, which compares the first quarter 2008 backlog of orders with the back log of orders one year earlier, fell to 55 percent from 67 percent in December 2007.
 
The prospective U.S. shipments index, based on the expectations of anticipated shipments in the second quarter of 2008 versus the same quarter last year, fell to 62 percent from 74 percent in the previous report.
 
The quarterly orders index, which compared new orders for the first quarter of 2008 with the same quarter one year ago, fell to 58 percent from 69 percent. The annual orders index fell to 68 percent from 75 percent in December 2007.
 
The inventory index, based on a comparison of inventory levels in the first quarter with those of one year ago, fell to 54 percent in March from 64 percent in December.
 
The capacity utilization index dropped to 38.3 percent in March 2008 from 46.5 percent in December 2007.
 
The export orders index fell from an all-time high of 80 percent to 72 percent.
 
“Despite the fact that all the indexes remain above the 50 percent threshold separating growth from contraction, the fact that they all fell indicated that the growth of U.S. manufacturing activity is slowing,” said Donald A. Norman, Ph.D., Manufacturers Alliance/MAPI Economist and survey coordinator. “At the same time, most of the companies represented in the survey are global, and the outlook for business abroad is somewhat rosier. Global growth will help offset any slowing activity in the United States.”
 
Norman adds that companies with global operations will be in a better position to weather the U.S. slowdown.
 
For additional information, click here.
More in Supply Chain