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NEMA’s EBCI Index for May Dips to Covid-Era Lows, But Future Conditions Index Rises

June 1, 2023

Dipping to its lowest reading since the immediate aftermath of the lock-down era recession, the current conditions component shed three points from April’s score to hit 40 points this month. The share of respondents indicating “unchanged” conditions reached 53%, and less than 15% of May’s panelists noted “better” conditions. In some cases, reports of unchanged conditions may have reflected a sense of healthy markets remaining solid. Said one respondent, “Order intake has increased versus Q4 2022 and is on par with Q1 2023.” The main concerns pointing to worsened conditions included distributor de-stocking and worries about the debt ceiling.

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.

Although improved, the future conditions component failed to reach expansionary territory for the fourteenth time out of the last 15 months, notching a nearly seven-point increase compared to April that nevertheless left it short of a reading that would suggest better conditions in six months.

Compared to April’s survey, fewer respondents expected “worse” conditions in half a year this time. From the comments, geopolitical concerns, along with uncertainty surrounding the debt ceiling status, provided a counterweight to upbeat expectations borne of the re-electrification push backed by massive federal government spending via the Infrastructure Investment and Jobs Act and climate legislation.