The manufacturing recovery continues to trend upward and has rebounded from severely depressed levels in 2009, according to the quarterly Manufacturers Alliance/MAPI Survey on the Business Outlook -- June 2010. The index rose to a record high 81% from 78% reported in the March 2010 report.
It breaks the previous high of 80% set in June 2004 and marks the third straight quarter it has reached 50% or above. The new benchmark for the index represents a significant turnaround from March 2009 when the index registered an historic low 21%.
"The overall composite index and several forward-looking individual indexes (orders, export orders, and U.S. prospective shipments) achieved new heights and indicate continued recovery in manufacturing," said Donald A. Norman, Ph.D., MAPI Economist."We should remain cautious, however, because many of the individual indexes are based on year-over-year comparisons. Manufacturing sector production fell sharply during the second quarter of 2009; a broad-based increase in production from the production trough reached at the end of the second quarter of 2009 would naturally lead to an increase in these indexes. Still, the broad-based strength in the composite index and the individual indexes point to further expansion in the next three to six months."
The backlog orders index, which compares the second quarter 2010 backlog of orders with the backlog of orders one year earlier, rose to 87% in June from 63% in the March survey.
The inventory index increased to 44% in June from 23% in March, still below 50%.
The quarterly orders index rose to a record high 97% from 85% in the previous survey.
The capacity utilization index improved to 20% in the current survey from 9.8% in the previous survey. While still far below the long-term average utilization rate of 32%, this is the first significant improvement for an index that had been stuck at very low levels since the fourth quarter of 2008.
The export orders index set a new high of 85% in June from 76% in March.
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