The APICS Business Outlook Index rebounded in Feb. to 48.4 from 46.8, largely due to a sharp increase in new orders. The future component (which includes new orders) jumped to 47.9 from 41.9 while the current component slipped to 48.8 from 51.8.
"The rebound in new orders suggests the decline associated with the Southeast Asian crisis has been shorter and milder than originally anticipated," said Dr. Michael Evans of Northwestern University, who compiles the index data each month at the direction of APICS-The Educational Society for Resource Management. "However , the overall index still indicates below-average growth in the manufacturing sector for Feb."
In addition to new orders, the production planning index also contributed to the boost in the Index's future component-moving back to 50 for the first time since Sept.1997. The only two weak areas identified by the APICS survey are employment component indicates that manufacturing firms have succeeded in filling long-vacant positions. "The actual inventory/sales ratio remains well above its desired level in spite of a rebound in shipments in Feb.," said Evans. He tied the high I/S ratio to continuing logistics problems in the transportation industry.
"The APICS index does not indicate above-average growth in the months ahead," said Evans. "On the other hand, the survey also shows that the long-anticipated slowdown caused by declining exports is unlikely to materialize in the near future."
The index, based on a confidential monthly survey of manufacturing firms, is compiled by Dr. Michael Evans and APICS, a not-fo-profit, 70,000-member educational society of manufacturing and service industry professionals. Newswire |
