Manufacturers Report Significant Improvement

April 15, 2010
MAPI Index is at highest in six years

Emerging optimism prevails in the manufacturing sector that the 'Great Recession' is finally turning to recovery, according to the quarterly Manufacturers Alliance/MAPI Survey. The March 2010 composite index rose to 78% from 57% reported in the December 2009 report, representing the highest level since the June 2004 survey registered 80%, and marks the second straight quarter it has reached 50% or above.

Just one year ago the March 2009 index registered an historic low 21%.

"The sharp increase in the composite index, along with significant improvement in individual indexes, point to increased confidence that the manufacturing sector will continue to recover from the rapid decline that took hold in the fourth quarter of 2008 and continued through the first half of 2009," said Donald A. Norman, Ph.D., MAPI Economist. "It is important to recognize, however, that many of the individual indexes are based on year-over-year comparisons and the composite index measures the direction of change rather than the absolute strength of activity in manufacturing. Still, the extent of the increases clearly points to further expansion."

Survey highlights include:

  • The quarterly orders index, based on forecasts for the first quarter of 2010 with the same quarter one year ago, rose to 85% from 42% in the previous survey.
  • The profit margin index increased to 74% in March from 38% in the December report.
  • The U.S. prospective shipments index, which reflects expectations for second quarter 2010 shipments compared with the second quarter of 2009, improved to 88% in the March survey compared to 59% in the December report.
  • The backlog orders index, which compares the first quarter 2010 backlog of orders with the backlog of orders one year earlier, rose to 63% from 36% in the December survey.
  • The export orders index, which compares first quarter 2010 exports with those of first quarter 2009, increased to 76% in March from 47% in the December survey.
  • The non-U.S. prospective shipments index, which measures expectations for shipments abroad by foreign affiliates of U.S. firms in the second quarter of 2010 compared to the same quarter of 2009, jumped to 80% from 64%.
  • The inventory index is based on a comparison of inventory levels in the first quarter of 2010 with those of one year prior. It increased to 23% in March from a near-record low of 8% in December.
  • The annual orders index, based on a comparison of expected orders for all of 2010 with orders in 2009, was an impressive 94% in March compared to 80% in December.
  • The research and development (R&D) index reflects the insights of participants regarding R&D spending in 2010 compared to 2009. The R&D index was 70%, slightly above the 66% recorded in the previous survey.
  • The U.S. investment index, based on expectations of executives regarding capital investment in 2010, was 69% up from 66%, indicating increased domestic investment this year.
  • The non-U.S. investment index provides insight into expectations regarding capital expenditures abroad. The March 2010 index was 70%, a marginal improvement over the 68 percent recorded in December, implying that a significant number of respondent companies are anticipating capital spending growth outside the United States.
  • The capacity utilization index, based on the percentage of firms operating above 85% of capacity, improved to 9.8% in the current survey from 7% in the previous survey. This is still far below the long-term average utilization rate of 32%.

Popular Sponsored Recommendations

Discover How an Eye Tracking Study Improves Training Procedures

Oct. 29, 2023
Did you know that your training processes can be streamlined by visualizing and analyzing key skills within your employee base? Find out how we use eye tracking to capture advanced...

Lean Manufacturing in the Age of the Industrial Internet

Oct. 24, 2023
Read how advanced MES capabilities can help you improve your labor utilization, reduce WIP, and optimize your production. Download the white paper today.

How Digital Twin Technology is Empowering Manufacturers

Sept. 27, 2023
This FAQ delves into why this technology offers business value and considerations toward implementation.

Food and Beverage 2024 Trends and Outlook for North America

Oct. 29, 2023
Ready to hear what 200 of your peers said are the top challenges and opportunities in 2024? Don’t fall behind. Uncover actionable insights to better prepare for 2024 in this whitepaper...

Voice your opinion!

To join the conversation, and become an exclusive member of IndustryWeek, create an account today!