The latest industry survey suggests continued slow and steady growth for the U.S. manufacturing sector into 2011, a promising sign not just for manufacturers but myriad service industries that support them.  The just-released Manufacturers Alliance/MAPI Survey on the Business Outlook,  covering December 2010, shows a composite index result of 75 percent — with 50 percent as the dividing line between contraction and expansion. That’s down from the September 2010 result of 77 percent, but as IndustryWeek noted, it’s the “fifth consecutive quarter the index has been above the 50% threshold.”

A few highlights from the IndustryWeek analysis:

  • Capacity levels remain strong. “The capacity utilization index, based on the percentage of firms operating above 85% of capacity, improved to 33.3% in the current survey from 28.1% in September. In addition to continuing its upward trend since reaching a record low of 7 percent in December 2009, the index is now above the long-term average utilization rate of 32%.”
  • Improving overseas shipments. “The non-U.S. prospective shipments index, which measures expectations for shipments abroad by foreign affiliates of U.S. firms in the first quarter of 2011 compared to the same quarter of 2010, improved to 89% from 84%.”
  • Orders are up. “The annual orders index, based on a comparison of expected orders for all of 2011 with orders in 2010, increased to 90% in the December survey from 86% in September.”
  • Cautionary note: Inventory levels have risen slightly. The inventory index is based on a comparison of inventory levels in the fourth quarter of 2010 with those of the prior year. The index increased to 69% in December from 63% in September, an indication that the growth of manufacturing sales is slowing.
  • Year-over-year order backlogs remain strong. “The backlog orders index, which compares the fourth quarter 2010 backlog of orders with the backlog of orders one year earlier, advanced to 83% in December from 81% in September.”

Need more details? Check out the full report from December and from previous quarters at MAPI.

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