For corporations, which have undergone years of cost cutting and for which cash flow still exceeds capital expenditures, bottom-line margin improvement is unlikely to continue driving profits. However, "poor sales," which is often listed by businesses as their biggest problem, may finally be turning the corner. Furthermore, as our Weekly Chart illustrates, improving demand appears to be occurring globally. Rising emerging market demand, progress in European financial conditions, and better prospects for reflation and reform in Japan, are starting to spur global manufacturing activity.

David Fuller's view There is more of interest in this letter, including the interesting graph showing three measures of manufacturing.