Contractor employment reflects slow construction market. One of the most direct indicators of business conditions in the electrical market is how many people are employed at electrical contractors, and as you can see in the chart on this page, employment at these firms only increased marginally in May. According to the Bureau of Labor Statistics, electrical contractors had 720,900 employees in May, a 0.2-percent increase over April and up 1.23 percent over May 2010. However, this indicator is still running below the 2010 annual average of 723,200, and well below the 939,400 level it hit in Sept. 2008, the recent high. When you consider Electrical Wholesaling magazine estimates that every employee at an electrical contractor is worth $39,510 in sales potential, this decrease is even more dramatic.
U.S. railroad freight traffic moving slow. According to the Association of American Railroads (AAR), Washington, D.C., June 2011, like the previous couple of months, was not a great month for U.S. rail carload traffic. U.S. freight railroads originated 1,428,580 carloads in June 2011, an average of 285,716 per week — up 0.9% (13,232 carloads) over June 2010 and up 11.6% (148,793 carloads) over June 2009 on a non-seasonally adjusted basis. This follows an increase of just 0.5% in May 2011 over May 2010 and a decline of 0.2% in April 2011 from April 2010.
The AAR said in its Rail Time Indicators Report, “Demand for rail service occurs as a result of demand elsewhere in the economy for the products railroads haul. Thus, rail traffic is a useful gauge of broader economic activity, especially of the ‘tangible’ economy.”
PMI gathers strength. The Purchasing Managers Index (PMI) increased 1.8 points in June to 55.3 points, indicating expansion in the manufacturing sector for the 23rd consecutive month. According to the Tempe, Ariz.-based Institute for Supply Management, one purchasing manager in its Electrical Equipment, Appliances and Components group sensed “a slight slowdown in overall business in both domestic and international markets, although still above 2010 at the same time.”