NEMA's Electroindustry Business Confidence Index (EBCI) for current conditions in North America fell for a third straight month in December, slipping to 58.3 points from 65.4 in November. The EBCI, a monthly survey of senior executives at member firms of the National Electrical Manufacturers Association (NEMA), Rosslyn, Va., had reached a 17-month high of 83.3 in the immediate aftermath of Hurricane Katrina in September.

While current economic conditions slipped from November, the EBCI index for North American market conditions six months from now rose back above the 50-point growth threshold to 56.3 points, after slipping to 48.1 in November.

The EBCI for current North American conditions continued to signal growth, and respondents' comments showed much less of the uneasiness seen as recently as November.

The gradual slide in the North American current conditions index appears consistent with NEMA manufacturers' comments in December. The comments reflected a traditional seasonal slowdown as well as a natural moderation from post-Katrina highs. One manufacturer comment seemed to capture the current climate: “After three fantastic months, December seems to be returning to normal.”

Sentiment regarding North American conditions over the next six months rebounded in December, having slipped below the 50-point mark in the previous month. NEMA members were optimistic about future business conditions. One respondent said he sees no significant change six months out, but expects heavy commercial construction to still be flat. Another NEMA manufacturer said all indications are that 2006 will be the third consecutive year of positive growth for the electrical industry.

One electrical manufacturer said he expected residential construction to decline, but expected that it will remain at relatively robust levels.

“The amount of the decline will be linked to interest rates and the availability and price of materials,” he said. “Commercial/industrial and utility construction will increase, but not enough to offset the decrease in residential construction activity.”

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