By SmallCap Sentinel Member, Dennis Lee

Well, the second quarter began today and right on schedule... April Fools Day. And as the Financial Sector posted a winning comeback from yesterday (remember yesterday’s entry?) the Manufacturing Sector slowed down in March from it’s already weakened February pace.  

Now granted that the U.S. is not the manufacturing ideal it once was, actually producing something that is tangible to the senses is a key ingredient of the U.S. economy and while the slowdown can be blamed on inventory levels, transportation costs (gas) and an unenlightened U.S. fiscal policy (we subsidize oil companies remember), those people who make widgets and gadgets and toys and auto parts get very little in the way of tax relief and incentives. 

According to The Institute for Supply Management today, its manufacturing index registered 48.6 last month, compared with 48.3 in February and February's reading had been the weakest in five years (readings below 50 indicate contraction, while those above 50 show growth). I believe there is however something bigger going on than a backlog of orders. 

Manufacturing is one of those unglamorous sectors that keeps things moving; people employed, saleable goods to our trading partners. It’s like filling potholes in the local town budget; not very becoming. The infrastructure of the U.S. has been in dire need of repair for years (please remember with respect the collapsing bridge in Minnesota last year) and so has a good deal of our vital manufacturing base. 

Isn’t it time as we slowly turn away from foreign obligations to domestic issues (and I’m not preaching isolationism), that we shore up the fundamentals? How about spreading some of those oil and farm subsidies around to community’s and businesses that make those ugly little calipers that make your car brakes stop?  

The Commerce Department also reported today that home building tumbled for a record 24th straight month. Are the politicians and industry leaders getting any of the ‘big picture’ stuff? I don’t think so. 

Have a look at some manufacturing companies and you decide... In Diversified Machinery, look at Turbine Truck Engine (OTCBB:TTEG) or Ingersoll Rand (NYSE: IR) or in Industrial Electrical Equipment segment, look at General Cable (NYSE:BGC) or in Machine Tools, check out Thermadyne (Nasdaq:THMD). They’ll all holding their heads above the water line, but for how long? 

Dennis Lee