US manufacturing index hits five-year high

A barometer of future activity in the manufacturing industry hit a five-year high in December, the Manufacturers Alliance/MAPI said Thursday.

The composite index of future business activity, based on a quarterly survey of the industry, rose to 67 points in December, up from 59 points in the previous survey in September.

It was the highest level since December 1997.

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

"The results from the latest survey send a strong signal that activity in the manufacturing sector will grow in 2003," survey coordinator Donald Norman said.

A profit margin index leapt to 63 points in December from 45 in September. A capital spending index climbed to 57 points from 45, breaching the 50-point mark for the first time since December 2000.

"The jump in the profit margin and capital spending indexes are particularly noteworthy given that these indexes have remained stubbornly low throughout the past two years," Norman said.

"The real question now concerns just how strong a recovery we can expect to see in 2003."

The orders index, comparing expected orders for 2003 with 2002, edged up one point to 75.

The shipments index, based on prospective shipments in the first quarter of 2003, increased nine points to 71. The export orders index increased five points to 59. The inventory index fell two points to 22.