Despite eking out a slight increase from 40.6 points in the prior month to 43.8 points in July, the current conditions component remained range-bound in the low 40s for the third consecutive month.
Not surprisingly, many comments mentioned supply chain constraints, and while most of that commentary noted continued difficulties in that regard, a slight shift in sentiment may have gotten underway as more than one panelist described signs of improvement. Even with that glimmer of hope, inflation, inventory concerns, labor shortages and recession fears served as a drag on business confidence.
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.
The future conditions component gained from June by a similar magnitude and through a similar mix of underlying responses as explained for the current conditions component. However, having started at a much lower reading, 29.1 points in June, the minor improvement posted left the July reading mired near the series historical low at 25 points. Inflation, continued labor concerns, manufacturing slowdowns likely to follow cleared backlogs, and geopolitical instability played a role in the low score for some NEMA executives, while mentions of supply chain suggested continued expectations of improvement ahead.