Auto Supplier Index Shows Stable Outlook

Auto suppliers are slightly less optimistic than they were in March, but overall attitudes remain stable because of rising North American vehicle output, according to the Original Equipment Suppliers Assn.

The OESA Automotive Supplier Barometer dipped to 60 this month from 64 the in March. A reading of 50 is considered neutral. The trade group says such factors as the European debt crisis are keeping a damper on supplier enthusiasm. OESA adds that smaller parts makers are more upbeat than their larger counterparts.

Capacity utilization among suppliers has increased to 85% from 80% last September.

Parts companies are split almost evenly on whether automakers are starting to shift sourcing away from low-cost countries to reduce supply chain risk. China was cited most often as a locale vulnerable to that trend.

In the wake of natural disasters last year that rattled the global supply chain, 70% of the companies surveyed report no movement toward a dual-source strategy. About 40% say they are seeking dual sources for the materials they buy.

Most respondents say the explosion at an Evonik Industries AG plant in Germany in late March has not yet had a major impact on production. The accident knocked out about half the world's supply of nylon-12, a material used in fuel and brake systems. But only 14% of suppliers say they are experiencing or expect to experience Evonik-related disruptions.