The 2Q'05 Composite Business Index published by the Manufacturers' Alliance/MAPI fell to 68 from 71 the prior quarter. The latest level is the lowest level since 3Q'03.

During the last ten years there has been a 66% correlation between the Composite Index Level and quarterly growth in US factory sector output.

The current orders index continued a slide begun one year ago. While the index level of 86 is down from it's peak of 93, the figures compare favorably to the lows around 30 during 2001.

The export orders index for 2Q slipped to 86 from the record level in 1Q of 90. Again, the figures remain elevated versus the average of 37 during 2001. During the last ten years there has been a 73% correlation between the export orders index and the y/y change in real US exports.

The profit margins index likewise moved lower to the lowest level since 3Q'03.Conversely, capital spending intentions for the coming year moved higher to the highest level since 4Q'03 and during the last ten years there has been a 74% correlation between the capital spending index a y/y growth in business investment in equipment & software.

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

Future Oil from the Federal Reserve Bank of St. Louis can be found here.