The results of the quarterly Manufacturers Alliance for Productivity and Innovation (MAPI) Survey on the Business Outlook (EO-123) indicate improvement, albeit marginal, from the previous report, and imply that the manufacturing sector is holding its own in uncertain economic times.
The survey’s composite index is a leading indicator for the manufacturing sector. The March 2013 composite index advanced to 56 from 55 in the December 2012 survey. That breaks a string of 10 consecutive quarterly declines. The index remains above the threshold of 50 for the 14th straight quarter, the dividing line that separates contraction and expansion.
“The March survey results offer a mixed bag,” said Donald A. Norman, Ph.D., MAPI senior economist and survey coordinator. “On the positive side, the composite index ended a long slide, and there is good news in the upswing in the investment indexes and in the profit margin index. Most of the other indexes, however—including current orders, prospective shipments, exports, backlog orders, and capacity utilization—all fell. The outlook over the next three to six months remains the same—growth at a slow pace.”
The Composite Business Outlook Index is a weighted sum of the Prospective U.S. Shipments, Backlog Orders, Inventory, and Profit Margin Indexes. In addition to the composite index, which reflects the views of 59 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.
While the overall composite index showed a slight gain, 9 of the 13 individual indexes decreased, including 5 of the 6 current business condition indexes.
Read the full MAPI press release.