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Getty Images 480270753 Oil Gas 595
Getty Images 480270753 Oil Gas 595
Getty Images 480270753 Oil Gas 595

Electrical Marketing's Leading Indicators: March 20, 2020

March 20, 2020

Purchasing Managers Index declines in February. While the full impact of the Coronavirus pandemic is not reflected in the Institute for Supply Management’s March report, it did still show a decline. According to Timothy Fiore, chair of the Tempe, AZ-based Institute for ISM Manufacturing Business Survey Committee, the February PMI registered 50.1%, down -0.8% from the January reading of 50.9%. Any reading at 50% or better indicates a positive industrial purchasing environment.

Baker Hughes rig count reflects slowdown in oil market. While the change in the latest total U.S. rig count didn’t show a weekly change through March 13, the year-over-year (YOY) data is down -235 rigs from March 2019. The drop is due in large part to a big decline in the number of rigs operating in Texas and Oklahoma. There are 158 fewer rigs operating in these states as of last week than there were a year ago. Not all markets were down. New Mexico currently has 117 rigs in operation, 11 more than this time last year.

Current freight rail traffic data shows declines. With the impact of the Coronavirus on the shipping and trucking industries tough to decipher just yet, the American Association of Railroads (AAR) cautioned business leaders against reading too much into its weekly rail traffic report. For this week ending March 7, total U.S. weekly rail traffic was 462,303 carloads and intermodal units are down -9.1% compared with the same week last year. Total carloads for the week ending March 7 were 229,742 carloads, down- 3.5% compared with the same week in 2019.

“Comparing rail traffic from one week to another must be done with caution because many different factors can come into play, especially in the winter when the weather can play a big role,” said AAR Senior Vice President John Gray in the press release. “That said, rail intermodal loadings last week were down noticeably more than the norm over the past year. With the number of ships arriving at West Coast ports from Asia down sharply due to the Coronavirus, it stands to reason that railroads are beginning to feel an impact too, at least in terms of intermodal. It’s impossible to quantify that impact with precision.”