MAPI survey: Expect moderate growth
The latest quarterly Manufacturers Alliance for Productivity and Innovation (MAPI) Survey indicates an overall picture of continued growth for the industrial sector, but at a more moderate pace during the first half of 2012.
The December 2011 composite index fell slightly, to 66 from 67 in the September report, yet manufacturing's staying power seems evident in the face of an uncertain economy. This is the ninth consecutive quarter the index has been above the threshold of 50, the dividing line that separates contraction and expansion. Despite the sixth straight decrease from the record high of 81 in June 2010, the index remains consistently high, averaging 70.8 during that period. The index started as a quarterly series in 1991.
"Despite the challenges posed by slower economic growth and continued problems in the construction and financial sectors, the manufacturing sector is the 'Energizer Bunny' of the U.S. economy," said Donald A. Norman, Ph.D., MAPI economist and survey coordinator. "Barring a meltdown in the Eurozone, the U.S. manufacturing sector should continue growing at a moderate pace heading into 2012."
The composite business outlook index is a weighted sum of the U.S. shipments, backlog orders, inventory, and profit margin indexes. In addition to the composite index, which reflects the views of 64 senior financial executives representing a broad range of manufacturing industries, the survey includes 13 individual indexes that are split between current business conditions and forward looking prospects.
The six current business condition indexes all showed declines but remain at relatively high levels.
The quarterly orders index, based on a comparison of expected orders in the fourth quarter of 2011 with those in the same quarter one year ago, fell to 70 in December from 79 in the September survey. The export orders index, which compares exports in the fourth quarter of 2011 with the same quarter in 2010, was 71 in the current survey, moving down from 80 in September.
The backlog orders index, which compares the fourth quarter 2011 backlog of orders with the backlog of orders one year earlier, fell to 67 from 73 in the previous report; declining backlogs signal slowing activity. The profit margin index slipped to 70 in December from 74 in September.
Based on a comparison of inventory levels in the fourth quarter of 2011 with those in the fourth quarter of 2010, the inventory index decreased to 73 in December from 74 in September. Norman, however, views this as a relatively positive sign since it suggests that the steady inventory build observed over the past year is slowing.
INDUSTRIAL SUPPLY MAGAZINE
The May/June issue of Industrial Supply magazine features an in-depth cover story about GHX Industrial. Plus, we're featuring articles by contributing writers Dr. Bharani Nagarathnam and Frank Hurtte, as well as interviews with numerous product and distribution industry experts.
