NEMA’s EBCI Index Retreats Again

Sept. 13, 2007
Electrical manufacturers saw the worse market conditions over the past two months but are optimistic about future business prospects, according to the Electroindustry Business Confidence Index (EBCI).

Electrical manufacturers saw the worse market conditions over the past two months but are optimistic about future business prospects, according to the Electroindustry Business Confidence Index (EBCI).

The EBCI, a monthly survey of senior executives in the National Electrical Manufacturers Association (NEMA), Rosslyn, Va., shows that current North American conditions slid for a second month in a row in August, dropping by 6.5 points to 39.1 points A reading of less than 50 points indicates a softening economy. The August decline from the July survey to below 50 points also suggests that the deterioration in conditions accelerated from a month ago.

However, the EBCI six-month outlook continued to provide some cause for optimism. Though the future conditions index for North America retreated slightly from July, it topped the “break-even” threshold of 50 points for a fourth straight month at a solid 54.3 points.

The EBCI current conditions readings in global markets were also mixed. European business conditions improved from a month ago in August, although at a slower rate, while the Latin American current conditions EBCI slipped below 50 points. The Asia/Pacific index also remained below 50 points, but improved markedly from a month ago. The optimistic near-term North American outlook extended to the other world regions, with the EBCIs for future conditions in Latin America, Europe and Asia/Pacific all well above 50 points in August.

This month’s EBCI results correspond with the mixed business signals seen in many end-use market segments. The current problems in the residential market are well documented. But the most recent Construction Put-in-Place statistics from the Department of Commerce for the office, health-care and educational market segments show double-digit year-to-year increases, as shown in the “Vital Statistics” chart on page 3.