ARLINGTON, Va. (AP) -- U.S. manufacturing activity will contract for the rest of this year but then start increasing next year, a survey of senior financial executives predicted Thursday.
The third quarter survey by Manufacturers Alliance/MAPI, a private research group, resulted in a composite index of 38, up from 24 registered in the second quarter, a historic low.
The group's latest survey also marks the highest level in a year, or since an index of 48 was recorded in September 2008.
"The rise in the composite index and the individual indexes, most of which reached record lows in the first or second quarters of 2009, point to the start of a recovery in the manufacturing sector," said Donald A. Norman, MAPI economist and survey coordinator.
"While many of the individual indexes remain at very low levels, the forward-looking indexes, like that for annual orders, are at much higher levels, indicating that manufacturing activity is expected to increase in 2010."
At 38, however, MAPI's September index still indicates overall manufacturing activity is expected to contract over the next three to six months. It also marks the fifth consecutive quarterly reading below 50, the demarcation point between growth and contraction.