NEMA March EBCI Remains Strong

April 7, 2006
Electrical manufacturers liked what they saw in March business conditions, according to NEMA’s Electroindustry Business Confidence Index (EBCI) for current North American business conditions.

Electrical manufacturers liked what they saw in March business conditions, according to NEMA’s Electroindustry Business Confidence Index (EBCI) for current North American business conditions. The EBCI, a monthly survey of electrical manufacturers conducted by the National Electrical Manufacturers Association (NEMA), Rosslyn, Va., measured 66.1 points in March, nearly unchanged from February’s similarly robust reading. The EBCI for current North American conditions has shown electrical industry growth for 35 consecutive months. The index for future North American conditions climbed to 58.1 points in March, up more than four points from 53.6 in February.

NEMA members said global business conditions were strong, as current sentiment and future expectations surpassed the 50-point growth threshold for a sixth straight month. Said one EBCI panelist, "Business is extremely strong. The first quarter will be one of the best, if not the best, on record." Another manufacturer said, "Bookings are ‘super hot’ this month."

While most comments on current conditions echoed this sentiment to some degree, one respondent identified communications as a lagging sector. Another NEMA member said its electrical distributors were concerned about excess inventory.

Expectations for future conditions remain tempered by uncertainty about rising interest rates and, in particular, their impact on the residential market. One panelist seemed to capture the prevailing sentiment: "With the Fed predicted to continue to increase borrowing rates, I expect that the market will slow down from the current aggressive pace."

One manufacturer had to temper his excitement over the market’s fast start in 2006.

"If we were to extrapolate off of the first two months' results, 2006 would be an absolute 'blowout' year. We believe that it will be a good year, but not that good. We still expect housing to gradually decline and nonresidential construction to gradually strengthen. Business spending on durable equipment and infrastructure should also improve as we move through the year."