January 23, 2008

Manufacturing to expand on export strength: survey

NEW YORK (Reuters) - U.S. manufacturing will increase as growth abroad offsets domestic sluggishness, according to a quarterly Manufacturers Alliance/MAPI survey released on Thursday.

The December composite index of 64 fell one point from the 65 reported in the September and June surveys, but six of the 10 factors measured by the survey were higher than the previous report despite recent negative economic data, the group said.

A figure above 50 indicates that overall manufacturing activity is expected to increase over the next three to six months.

The report surveys 56 executives representing a broad range of manufacturers.

"The optimism revealed in this quarter's survey may reflect that most survey respondents are with global manufacturers whose fortunes are determined by economic trends abroad as well as those in the United States," said Donald Norman, economist at the manufacturing group and survey coordinator.

The exports orders index, which compares the strength of fourth quarter 2007 exports relative to exports a year ago, reached an all-time high of 80 percent, a point higher than the 79 percent posted in June 2007.

Also, 64 percent of the survey's respondents said the weaker dollar helps their companies.

The investment index, which assesses executives' expectations for capital investment in 2008 compared with 2007, rebounded to 74 percent in the current report from 62 percent in the previous one.

The research and development index also rose to 77 percent from 75 percent in the September report.

Other indices showed slight declines, however. The annual orders index, which compares expected orders for 2008 with orders in 2007, slipped to 75 percent compared with 78 percent in the September survey.

Also, the profit margin index fell one point, to 68 percent from 69 percent in September.

Only 7.5 percent of respondents said the credit crunch was starting to affect their business.

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