Manufacturing Sector Strong Despite Looming Credit Crisis

Analysts are saying that machinery manufacturers have so far been largely unaffected by the continuing credit crisis partially thanks to healthy cash flows, but a larger economic slowdown, like the failure to pass the bailout bill, could quickly change things. Many manufacturers analysts say have dramatically reduced capital spending by creating additional capacity by getting rid of inventory and shrinking the floor space needed for production.

“In the industrial sector, there hasn’t been excessive borrowing due to leaner management and manufacturing practices in recent years,” said Ingalls & Snyder analyst Alexander M. Blanton citing Deere and Caterpillar as examples.