The 2Q '08 Composite Business Index published by the Manufacturers' Alliance/MAPI fell to 47 from a revised level of 58 in 1Q '08. Prior years' readings were revised and the latest was the lowest since 1Q '02.

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 sharply to the lowest level since 2002. The 1Q export orders index, however, remained relatively strong and ticked up slightly from 1Q, near its averages of the last four years. 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 fell to its lowest level since 3Q '03 though capital spending intentions for the coming year remained relatively firm, down just moderately from the averages of the last four years. During the last ten years there has been a 75% correlation between the capital spending index and 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.