As the ripple effects of the Iraqi conflict and the outbreak of SARS continued to diminish, business confidence in current conditions affecting the electrical manufacturing industry nevertheless weakened in June across all regions except Latin America, according to NEMA's Electroindustry Business Confidence Index (EBCI).
Based on the results of a monthly survey of senior managers at member companies of the National Electrical Manufacturers Association (NEMA), Rosslyn, Va., the EBCI is designed to gauge the business confidence of the electroindustry in four key world regions: North America, Latin America, Euope and Asia/Pacific.
As in May, only the confidence index for North America remained above the threshold level of 50. An index reading above 50 indicates expansion; below 50 indicates that the manufacturing economy is generally contracting.
In contrast, confidence in conditions six months from now widened in all regions except Europe. The index for all regions remained at or above 50 for all regions except Europe. Most comments by respondents focused on the persistent weakness in the industrial and nonresidential construction sectors of the U.S. economy.
Said one survey respondent, “The industrial sector is still depressed with little to no evidence of any improvement in the next six months. Over capacity in all manufacturing sectors of the wire and cable market is so large that it would take a combination of a sustained upturn in the market and a reduction in capacity to make any significant difference to the current business climate.”
North America is the only region that breaks the threshold of 50 index points in the current conditions measure. The current conditions index remained above 50 for a second consecutive month, which is the first time the index has had back-to-back readings above 50 since September 2002.