ARLINGTON, VA-The U.S. manufacturing sector will continue to expand, but at a more moderate pace over the next 3 to 6 months, according to the quarterly Manufacturers Alliance/MAPI survey on business outlook.

In June, the alliance's composite index of 71 was marginally lower than the 74 reported in the March 2006 survey. However, because an index of 50 or higher indicates upcoming increases, the U.S. economy remains on firm ground.

The survey reflects the views on current and future business conditions of 60 senior financial executives representing a broad range of manufacturing industries. While a variety of indexes are included in the survey, the business outlook index is a weighted sum of shipments, backlogs, inventories and profit margin indexes.

Eight of the 10 factors measured by the quarterly survey were lower than the previous report, tempering somewhat the outlook for future business activity, but two indexes did show increases.

"This quarter's survey results send a clear signal that the rate of expansion in the manufacturing sector will continue, but at a slower pace throughout the remainder of the year," says the alliance's survey coordinator, Don Norman, Ph.D. "All the indexes remain at relatively high levels in absolute terms and the increase in the investment and R&D indexes point to sustained strength in manufacturing."

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