The Manufacturers Alliance/MAPI quarterly composite index rose sharply in March, reflecting prevailing optimism among manufacturers that the recovery is finally taking hold.
The March index rose to 78% from 57% in the December 2009 report. This is the second consecutive quarter in which the index has topped 50%, and is the highest level since June 2004, when the index hit 80%, the economic research group said today. A year ago, the March index hit a record low of 21%.
Even so, the economy still isn’t firing on all cylinders. Unemployment figures remain high, and the rising federal deficit could cause continued sputtering.
“This shows that manufacturing is clearly recovering,” but does not indicate the strength of the recovery, said Cliff Waldman, an economist at the Manufacturers Alliance. “It looks for the moment to be durable, partially due to temporary factors,” including the federal stimulus and the boost in manufacturing production to replenish inventories.