By Nick Zieminski
NEW YORK (Reuters) - The giants of U.S. industry have tried to convince investors they are supported by more than one pillar.
As the U.S. economy slows this year and possibly tips into recession, manufacturers are increasingly looking overseas for sales and profit growth.
Since the last recession in 2001, companies have boosted their manufacturing capacity abroad, and many now generate the bulk of their sales outside their home market.
But one look at a stock chart of GE (GE.N: Quote, Profile, Research, Stock Buzz), Ingersoll-Rand Co Ltd (IR.N: Quote, Profile, Research, Stock Buzz), or Caterpillar (CAT.N: Quote, Profile, Research, Stock Buzz) suggests many investors remain skeptical. Dow components GE and Caterpillar are each down about 20 percent from 2007 highs. Ingersoll, which is buying Trane Co. TT.N for about $9.5 billion, is down 30 percent.
The Reuters Manufacturing Summit 2008 from February 25 to 28 in Chicago will focus on the economic prospects for the U.S. and the world, raw materials prices, and the outlook for mergers and acquisitions.
U.S. economic growth is clearly slowing. A Federal Reserve index of manufacturing activity in the mid-Atlantic region on Thursday showed the deepest contraction in 7 years, while a Conference Board index of leading indicators fell for the fourth consecutive month in January.
U.S. industrial and consumer demand in the first half of 2008 "is likely to be sharply weaker" than in the fourth quarter, Goldman Sachs said last week. Companies meeting with analysts in coming weeks may begin to "'look across the valley' to longer-term growth," analyst Deane Dray said.
But while the decline in the U.S. housing sector has been well documented, demand elsewhere remains solid. An ongoing boom in aerospace, for example, will help lift profits at cockpit electronics maker Honeywell (HON.N: Quote, Profile, Research, Stock Buzz), engine maker GE and helicopter and engine maker United Technologies Corp (UTX.N: Quote, Profile, Research, Stock Buzz). Continued...
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