ARLINGTON, Va. -- A recovery for the manufacturing sector may be at hand, according to the Manufacturers Alliance/MAPI. MAPI's December 2009 composite index rose to 57 percent from 38 percent in September, the highest level since March 2008, and the first time in six quarters it rose above 50 percent.
The current reading indicates overall manufacturing activity is expected to grow in the next three to six months.
"Since many of the indexes are based on comparisons with activity in the fourth quarter of 2008, during which manufacturing sector activity had taken a sharp downward turn, the improvement in the composite index is not, by itself, evidence of a meaningful recovery," said Donald. A. Norman, MAPI economist. "The extent to which the individual indexes improved, however, along with the significant increases in the forward looking annual orders and investment indexes, provide the strongest indication to date that the manufacturing sector is on the upswing."
The quarterly orders index rose to 42 percent from 11 percent in the previous survey. The non-U.S. prospective shipments index rose to 64 percent from 33 percent, while the U.S. prospective shipments index rose to 50 percent from 30 percent.
The backlogs index improved to 36 percent from 16 percent in September. An increase in backlogs is usually a sign that new orders exceed shipments.
The U.S. investment index was at 66 percent, up from 47 percent. The non-U.S. investment index rose to 68 percent from 52 percent, indicating an expected increase in capital spending outside the U.S.
The R&D index improved to 66 percent from 49 percent. The annual orders index rose to 80 percent from 66 percent, and the profit margin index increased to 38 percent from 22 percent.
The inventory index rose to 8 percent from a record low of 7 percent, while the capacity utilization index fell to 7 percent from 8.4 percent in the previous survey.
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