The U.S. manufacturing sector has held up well during an uneven economic recovery and should continue to expand, but likely at a slower pace, according to the Manufacturers Alliance/MAPI. The group's September 2010 composite index fell slightly to 77% from a record high 81% in the June 2010 report. 

It marks the fourth straight quarter it has reached 50% or above, the benchmark between contraction and expansion.  In year-over-year comparisons, the current index is over twice that of the 38% in the September 2009 survey, signaling an impressive turnaround for industry.

"Although some indexes based on year-over-year comparisons fell slightly, all remain at very high levels," said Donald A. Norman, Ph.D., MAPI Economist."The forward looking indexes, based on expectations for annual orders, investment, and R&D spending in the coming calendar year, were all at high levels. Especially encouraging is the continued improvement in the capacity utilization index. The pace of expansion may have slowed, but growth is expected to continue." 

Highlights from the survey:

*The U.S. investment index, which is based on expectations of executives regarding capital investment for 2011 compared to 2010, was 80%, a significantly improved outlook from 47% in the September 2009 survey.

*The non-U.S. investment index, based on expectations regarding capital expenditures abroad in 2011, was a solid 73%, easily outpacing last year's 52% for 2010. 

*The research and development (R&D) index reflects the views of survey participants regarding R&D spending in 2011 compared to 2010. The R&D index was 70%, well above the 49% in the September 2009 report.

*The annual orders index, based on a comparison of expected orders for all of 2011 with orders in 2010, came in at 86%, compared to 66% a year ago.

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