After several months of positive readings, the NEMA Electroindustry Business Confidence Index (EBCI) slid noticeably in May.

In the EBCI report, a monthly survey of senior managers at member firms of the National Electrical Manufacturers Association (NEMA), Rosslyn, Va., most of the month's comments were positive. However, the unblemished optimism of respondents in the April report was gone, and “a dash of caution” has returned, the report said.

All but one of the current conditions indexes contracted from their April levels. North America, Latin America, and Europe narrowed considerably. Europe suffered the largest contraction compared to its April level, losing 12 points to reach 58 on the index scale. Asia/Pacific stayed essentially flat at 69 points.

Despite the contraction, the EBCI's Current Conditions indexes for all four regions remained at or above 50 in May, the threshold indicating conditions are favorable for growth.

Despite the negative numbers, several respondents are still optimistic about the current business prospects for the electrical manufacturing industry.

“The first four months of 2004 were quite strong, relative to late last year, and May continued that trend,” said an electrical manufacturer. “Our residential, commercial and OEM businesses are all exhibiting good growth trends and industrials are beginning to dust off projects that had been delayed or put on hold.”

The future conditions picture signaled some erosion in confidence, as three of the four measures contracted in May. Comments from electrical manufacturers were mixed. Said one executive, “Recovery seems to be gaining momentum, but an underlying threat of uncontrolled material costs is dampening enthusiasm.”

Another manufacturer had similar concerns about the prices of key metals. “Steel and copper volatility continue to challenge normal demand patterns,” he said.

Want to use this article? Click here for options!
© 2007 Penton Media, Inc.