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Economy in Brief

MAPI Business Outlook Survey Off Further  
by Tom Moeller November 6, 2006

The 3Q '06 Composite Business Index published by the Manufacturers' Alliance/MAPI fell for the second quarter to 64 from 71 the prior quarter. The figure was at the lowest level since the second quarter of 2003.

During the last ten years there has been a 69% correlation between the Composite Index Level and quarterly growth in US factory sector output.

The current orders index fell to 77 from 81 in 2Q and that was the lowest since late 2003. The 3Q export orders index, however, improved moderately to 75. During the last ten years there has been a 59% correlation between the export orders index and quarterly growth in real US exports.

The profit margins index improved slightly to 75 from 74 in 2Q and so far in 2006 the quarters have averaged 77 versus an average 65 last year.Capital spending intentions for the coming year fell sharply 56 from the record high 86 in 2Q. During the last ten years there has been a 75% correlation between the capital spending index a q/q growth in business investment.

The survey of 60 senior financial executives representing a broad range of manufacturing industries reflects the views on current & future business conditions. The business outlook index is a weighted sum of shipments, backlogs, inventories, and profit margin indexes.

For the latest US Business Outlook from the MAPI click here.

Confessions of a Data Dependent are Dallas Federal Reserve Bank President Richard W. Fisher Remarks before the New York Association for Business Economics and they are available here.

Manufacturers' Alliance/MAPI Survey 3Q '06 2Q '06 3Q '05 2005 2004 2003
Composite Business Index 64 71 66 70 76 67
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