NEMA Demand Indices Show Mixed Results to End 2010

March 11, 2011
Demand for electrical products varied from one category to another at the end of 2010, according to demand indices from the National Electrical Manufacturers

Demand for electrical products varied from one category to another at the end of 2010, according to demand indices from the National Electrical Manufacturers Association (NEMA), Rosslyn, Va. NEMA's Primary Industrial Controls Index increased 3.3 percent on a quarter-to-quarter basis during the fourth quarter of 2010 and registered sequential gains in five of the last six quarters. This latest increase is nearly 24 percent above its level of one year earlier.

Nonetheless, inflation- and seasonally-adjusted shipments of industrial control equipment still have ground to make up before surpassing the previous cyclical peak. The Primary Industrial Controls and Adjustable Speed Drives Index, which serves as a broader measure of industrial controls demand, advanced 2.5 percent between the third and fourth quarter of 2010 and registered a 21.6 percent gain versus 4Q 2009.

NEMA said its industrial controls indices will likely enjoy solid growth going forward as companies continue to ramp up spending on capital goods.

Motors also edged higher to close out the year, as NEMA's Motors Shipments Index (MSI) increased 1.4 percent from the previous quarter. Shipments remained appreciably lower than the levels observed during 2006-2008, but demand has trended higher over the past six quarters, climbing nearly 14 percent since mid-2009. On a year-over-year basis, shipments registered a gain of 3.9 percent versus the fourth quarter of 2009. Inflation-adjusted shipments of fractional horsepower motors posted a large year-over-year increase while integral horsepower motors declined versus 4Q 2009.

Lighting equipment, meanwhile, receded 2.1 percent after seeing modest gains in each of the five prior quarters. NEMA's Lighting Systems Index showed fixtures essentially unchanged year-over-year, indicating that aggregate lighting equipment demand has not improved appreciably since the recovery began and remains well below the levels observed during the previous economic expansion. Among the five lighting systems products included in the index, emergency lighting, ballasts and large lamps posted year-over-year declines in shipments while fixtures and miniature lamps registered solid gains compared to the fourth quarter of 2009.

NEMA's lamp indices for incandescent and compact fluorescent (CFL) lamps showed mixed results during the fourth quarter of 2010. Shipments of incandescent lamps were in positive territory for the first time in 2010, increasing 14.3 percent compared to the previous quarter. CFLs contracted for the third consecutive quarter, decreasing 3.9 percent. Both incandescent and CFL index components posted negative year-over-year growth of 9.5 and 8.8 percent, respectively. For the calendar year, incandescent lamp shipments declined 8.3 percent while CFLs declined by less than 1.0 percent compared to 2009 levels.

CFLs gained market share for calendar year 2010 as a whole, increasing its foothold in the U.S. market by 1.5 percentage points to just over 25 percent. The share of incandescent lamps is likely to decline over the next four years as the Energy Independence and Security Act of 2007 efficiency standards is implemented.