With lockdown policies fully in effect across most of the U.S., the current conditions component fell by more than 15 points to 15.8 in April. The last time this reading had drifted so far below 50, the United States was in the midst of the 2007-2009 recession.
No one reported unchanged conditions, and the vast majority of respondents noted conditions were worse. However, some panelists see better conditions in their sectors, with one describing activity as “torrid.” Of course, most comments conveyed deep concern in light of, in the words of one executive, a “significant drop in orders.”
The ElectroIndustry Business Conditions Index (EBCI) is a monthly survey of senior executives at electrical manufacturers published by the National Electrical Manufacturers Association (NEMA), Rosslyn, VA. Any score over the 50-point level indicates a greater number of panelists see conditions improving than see them deteriorating.
A review of respondents’ comments suggested that the nearly 17-point gain in the future conditions component, from 43.8 points in March to 60.5 points this month, was more a reflection of the belief that the worst effects of the pandemic response will have dissipated six months from now. The panel was far from unanimous in that relative optimism, with a combined 42% expecting worse, or at best unchanged, conditions. Many respondents assumed improved conditions ahead, but the assessments of potential gains ranged widely, from “better than during the shutdown, but a slow and difficult recovery” to “a strong rebound starting in the third quarter.”