According to the quarterly Manufacturers Alliance for Productivity and Innovation (MAPI) Business Outlook, widespread improvement in a number of indexes suggests optimism for the manufacturing sector in the next three to six months.

The composite index increased from 58 in June to 66 in September, which was the third straight quarterly advance and the highest level since a December 2011 reading of 66. For 16 quarters, the index has remained above the threshold of 50, the dividing line separating contraction and expansion.

According to the report most indexes improved in September, and several rose significantly. The Current Orders Index jumped from 53 in June to 70 in September. The Prospective U.S. Shipments Index, based on expected fourth quarter shipments, rose from 67 to 76. The Non-U.S. Prospective Shipments Index increased from 60 in June to 70. The Backlog Orders Index rose for the second straight quarter, from 54 in June to 59, while the Profit Margin Index increased from 56 to 68. The Capacity Utilization Index rose from 21.2 to 30.0, just below its long-term average of 32 percent. Also remarkable was the rebound in the Export Orders Index, which increased from 45 in June to 61. The Inventory Index was 49, down from 51 in June. This suggests that companies are neither drawing down nor building inventories.

Each September, respondents are first asked about their expectations for annual orders, U.S. and non-U.S. investment, and R&D spending for the following year as compared to the current year—in this case, 2014 vs. 2013. The Annual Orders Index was a strong 81, indicating that respondents expect orders will increase above 2013 levels next year. The weakest indexes within this group were the U.S. Investment Index at 53 and the Non-U.S. Investment Index at 54. Still, both were above 50, indicating an overall increase in investment spending in 2014. Finally, the R&D Index was 66.

This quarter’s survey results are a break from previous quarters in which a few indexes showed very modest improvement while others declined. The September increase in the composite index and the marked improvement in most individual indexes signal an increase in the pace of manufacturing activity over the next three to six months.

To read the MAPI Research report click here.