Index Shows Plunge In Manufacturing In June

Jan. 13, 2005
The June APICS Business Outlook Index plunged to 44.0 from 52.7 in May. The June figure is the lowest value since October 1998, when concerns about economic viability were heightened by the collapse of the Russian ruble. The current conditions component ...

The June APICS Business Outlook Index plunged to 44.0 from 52.7 in May. The June figure is the lowest value since October 1998, when concerns about economic viability were heightened by the collapse of the Russian ruble. The current conditions component fell to 47.7 from 53.6, the lowest level since April 1999. The future conditions component plunged much more sharply, falling to 40.2 from 51.6, the lowest level since October 1997, when fears about the economy were heightened by the collapse of Southeast Asian currencies. A value of 50 for each individual component signifies that manufacturing conditions have not changed from one month to the next. Almost all of the individual components of the APICS index fell below 50 in June, with particular weakness in manufacturing shipments and new orders. Inventory stocks rose in June, but since most firms now find their actual stocks above desired levels, stocks should decline over the next few months. Unfilled orders rose in June, but only because new orders fell even more sharply than shipments. "The only components that remained above 50 do not necessarily convey good news about the future," notes Michael K. Evans, who compiles the index for APICS -- The Educational Society for Resource Management. "Hence the APICS index signals that the slower growth this quarter will continue at least in the third quarter and probably in the fourth quarter as well." Outlook for the rest of 2000, according to APICS, points to only 2.5% to 3% growth in the second half of the year, following an estimated decline from 5.4% to 3% growth in the second quarter.

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