NEMA’s EBCI Indexes for July Drop Sharply But Remain Positive

The current conditions component slid nearly 13 points to 57.1 points in July from 70 points the month before, leaving it still in positive territory but with the lowest reading since last October.

At 57%, the majority of respondents considered July’s conditions unchanged from the previous month’s, but a noticeable uptick in the share of responses noting worse conditions helped claw the current component back from its recent loftier readings. Comments were relatively negative in tone with all of them touching in one form or another on lingering supply chain woes. Concern about the potential of an unwelcome change in the pandemic’s trajectory also found its way back into the comments.

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.

Despite retreating to its lowest value since the early days of the pandemic last year, the future conditions component remained well within expansion territory this month at 67.9 points which reflected a 12-point change from June’s reading. Fully half of the responding panelists still expect better conditions in six months, but the share of those indicating worse conditions ahead doubled to 14% in July, and the proportion of respondents expecting the business environment to be unchanged edged up as well. In addition to supply difficulties mentioned in regard to current conditions, panel members also expressed concern about macroeconomic trends such as rising inflation and interest rates.