NEMA’s EBCI Index for May Hits Turbulence with 11-Point Monthly Decline

Confidence has become rather wobbly of late in NEMA’s monthly EBCI Index, as the current conditions component fell below 50 points for the second time this year and hit its lowest level since right after the end of the recession. An 11-point shift from last month left May’s current conditions reading at 42.9 points, as now more than one-third of respondents reported “worse” conditions during this survey period.

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.

Lockdowns in China and other ongoing supply chain problems have bedeviled electrical manufacturers. Now added to that mix, one executive noted the deleterious effects soaring energy costs and U.S. tariffs are having on business conditions. Not all was negative, however, as some panel members noted their companies experienced better than expected orders activity.

The future conditions component has remained range-bound in the lower thirties for the last three months now as the May reading came in at 32.1 points. The list of potential pitfalls expected to affect the electroindustry and shared by NEMA executives is long.

Most of the challenges noted are ongoing, including rising inflation and interest rates, Covid-19, labor and materials shortages, supply chain snags and geopolitical concerns. Looming disruptions include turmoil surrounding mid-term elections and the potential for work stoppages surrounding union contract negotiations.