The current conditions component edged lower, staying below the no-change threshold level of 50 points for the second consecutive month with a score of 40.6 points in June. Somewhat counterintuitively, the June reading’s erosion came as a result of an increase in the proportion of respondents indicating “unchanged” conditions and despite a drop in the share of “worse” conditions.
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.
Much of the provided commentary could be considered mixed, with some panel members noting strong demand hampered by continued supply constraints. On the flip side, one NEMA executive experiencing a reduction in demand characterized it positively because it allowed for catching up with backlogs.
Confidence reflected in the future conditions component broke through the low-thirties range it had maintained for a handful of months. Declining by more than 10 points to a reading of 21.9 points in June, the forward-looking metric reached its lowest point since the depths of the Great Recession.
Three-quarters of survey respondents anticipate “worse” conditions in six months. Most of the comments suggest the myriad of external shocks, such as inflation and the bitter medicine the Fed will use to fight it, dogged supply chain problems, domestic and international conflict and cooling economies around the world, will create headwinds for electrical manufacturers.
