The Electroindustry Business Confidence Index (EBCI) published by the National Electrical Manufacturers Association (NEMA), Rosslyn, Va., rebounded nicely in May after a dismal April.
With a good deal of war-related uncertainty lifted, the current conditions index for North America surged to nearly 58 points in May, up 33 points from in April. The future conditions index edged up a point to 77 points in May. With both indexes registering above 50 points, the senior managers at electrical manufacturers on the EBCI survey panel are clearly bullish on the prospects for electrical manufacturing in North America now, especially when compared to recent history, and for much of the remainder of the year.
Said one respondent, “There is a need for product in the utility and communications market but a reluctance to buy to the levels needed. The industrial sector continues to be greatly depressed despite bright lights in some of the small specialty sectors.”
Another manufacturer said he was “starting to see some signs of very modest improvement ‘around the edges.’
“Business is still very soft and, in fact, below previous year levels,” he said. “But the momentum, which has been on the downside for over two years, now seems to be shifting to neutral or even slightly improving. The impact of SARS is a big downside risk in Asia.”
With the war behind us and the Federal Reserve's determination to head off deflation with low nominal interest rates, the stage is set for the manufacturing sector to begin a labored climb from a recession level of activity that has dimmed the once hopeful recovery that began in the second half of last year.