Report: Exports Cushion Weakness In Manufacturing

Report from the Manufacturers Alliance/MAPI suggests that exports and multinational interests are helping companies weather the U.S. economic storm.

ARLINGTON, Va. — According to the Manufacturers Alliance/MAPI, manufacturers have been able to stave off the challenges facing the sector. The Quarterly Business Outlook Survey’s composite index for December 2007 was 64, slightly below the 65 registered in the September 2007 and June 2007 surveys. The composite index measures the direction of change.
A business index above 50 means that overall manufacturing activity is expected to increase over the next three to six months.
Six of the 10 factors measured by the survey were higher than the September 2007 report.
The export orders index, which measures how fourth quarter 2007 exports compare with those of fourth quarter 2006, was at an all-time high of 80 percent, higher then the 79 percent in June 2007 and the 75 percent in September 2007.
The investment index, which measures expectations regarding capital investment in 2008 compared to 2007, rebounded to 74 percent in December from 62 percent in September.
The capacity utilization index rose to 46.4 percent in December from 41.7 percent in September.
The research and development index, which measures R&D spending in 2008 compared to 2007, rose to 77 percent in December from 75 percent in September.
The backlogs index, which compares fourth quarter 2007 backlog of orders with the backlog of orders one year earlier, was at 67 percent in December, up one point from September. The inventory index was 64 percent, also up a point from its September level.
The quarterly orders index, which compared new orders for the fourth quarter of 2007 with the same quarter a year ago, was at 69 percent in December, down from 73 percent.
The prospective shipments index, which measures expectations of anticipated shipments in the first quarter of 2008 compared with the same quarter last year, dipped from 77 percent to 74 percent.
The annual orders index, which compares expected orders for all of 2008 with orders in 2007, dropped from 78 percent to 75 percent in December.
The profit margin index was down one point to 68 percent in December.
“Although the composite index and the indexes for current orders and prospective shipments slipped from their September levels, they continue to point towards growth in manufacturing,” said Donald A. Norman, Manufacturers Alliance/MAPI Economist and survey coordinator. “The continued strength of these indexes and the rise in others (notably exports, investments, backlog orders, and capacity utilization) contrasts with recent economic reports suggesting the U.S. economy is slipping into recession. The optimism revealed in this quarter’s survey may reflect that most survey respondents are with global manufacturers whose fortunes are determined by economic trends abroad as well as those in the United States.”
More in Supply Chain