Manufacturing to Expand on Export Strength

U.S. manufacturing will rise as growth abroad offsets domestic sluggishness, according to a quarterly Manufacturers Alliance/MAPI survey released recently. The December composite index of 64 fell one point from the 65 reported in the Sept. and June surveys, but six of the 10 factors measured by the survey were higher than the previous report despite recent negative economic data, the group said. A figure above 50 indicates overall manufacturing activity is expected to increase over the next three to six months. The report surveys 56 execs representing a broad range of manufacturers. The exports orders index, which compares the strength of 4th-Q 2007 exports relative to exports a year ago, reached an all-time high of 80%, a point higher than the 79% posted in June 2007. Also, 64% of the survey's respondents said the weaker dollar helps their companies. The investment index, which assesses executives' expectations for capital investment in 2008 compared with 2007, rebounded to 74% in the current report from 62% in the previous one. The R&D index also rose to 77% from 75% in the Sept. report. Other indices showed slight declines, however. The annual orders index, which compares expected orders for 2008 with orders in 2007, slipped to 75% compared to 78% in the Sept. survey. Also, the profit margin index fell 1 point, to 68% from 69% in Sept. Only 7.5% of respondents said the credit crunch was starting to affect business.