“This quarter’s survey results add an exclamation point to the view that manufacturing activity has slowed, but this is not to suggest that it is crashing,” said Donald A. Norman, Ph.D., MAPI Senior Economist and survey coordinator.
The results of the quarterly Manufacturers Alliance for Productivity and Innovation (MAPI) Survey on the Business Outlook indicate slowing growth for U.S. manufacturing over the next three to six months, in line with most other forecasts that show a continued softening in the industrial base.
The survey’s composite index is a leading indicator for the manufacturing sector. The September 2012 composite index fell to 56 from 61 in the June 2012 survey.
Despite the decline -- its ninth straight since reaching a record high of 81 in June 2010 -- the index remains above the threshold of 50, the dividing line that separates contraction and expansion. The drop of 5 percentage points, however, is the largest over the nine-quarter decline and comes on the heels of a 4 percentage point drop in the previous report.
“This quarter’s survey results add an exclamation point to the view that manufacturing activity has slowed, but this is not to suggest that it is crashing,” said Donald A. Norman, Ph.D., MAPI Senior Economist and survey coordinator.
“In fact, it is expected to expand, even if at a much slower rate than what we’ve experienced over the past two years.”
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 60 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.
Twelve of the 13 indexes decreased, including the six current business conditions indexes.
