APICS index suggests sluggish growth

By Staff -- Logistics Management, 6/1/1998

Growth in manufacturing will likely be sluggish at best throughout the second quarter, suggests the most recent edition of the APICS Business Outlook Index. APICS is an educational organization for professionals in resources planning, including manufacturing, inventory, and logistics management.

The index, based on a survey of manufacturing firms, was unchanged at 47.4 in May. APICS says that an index level between 45 and 50 indicates that manufacturing is still rising but at a below-average rate. That conclusion is consistent with other economic data, including drops in manufacturing employment, flat manufacturing production, and flat durable-goods new orders, according to the report. In addition, a sharp decline in unfilled orders reported for May signals that manufacturing is not likely to rebound this summer, the organization predicts.

Some other telling indicators in the report:

* Manufacturing shipments rose an estimated 0.5 percent in May. The biggest gain was in consumer durables, while shipments of machinery showed little change.

* Manufacturing employment dropped by an estimated 5,000 jobs during that month.

* Manufacturing production rose by just 0.2 percent, to 0.3 percent.

* Manufacturing inventory stocks were unchanged overall. Most sectors showed slight declines, although construction and building-materials stocks grew.

* Orders dropped by 0.5 percent while shipments rose slightly, leading to a reduction in backlogs.