The Composite Business Outlook Index was 55 in December, down slightly from 56 in September, pointing to continued expansion over the next three to six months. The index has, however, declined steadily since reaching a record high of 81 in June 2010. Most of the individual indexes remain above 50, the dividing line between expansion and contraction. The small drop in the composite index, coupled with the improvement in the forward looking indexes, suggests that the decline in manufacturing activity that started in March 2012 may be bottoming out. Assuming Congress can come to an agreement to cut spending and raise the debt limit by late February, the manufacturing sector can expect slow—not declining—growth heading into 2013.
There are reports that some manufacturers are beginning to bring manufacturing operations located abroad back to the United States. This quarter’s wildcard questions ask whether companies have brought operations back to the United States or are planning to do so and the factors affecting location decisions. Survey respondents were also asked about the competitiveness of U.S.-based manufacturing in global markets.
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