NEMA's Electroindustry Business Confidence Index (EBCI) for current North American conditions stood at 55.8 points in May. While representing a decline from readings in the high 60s posted in recent months, May's result was still strong. The EBCI index has now topped the 50-point growth threshold for 37 consecutive months. The EBCI is a monthly survey of electrical manufacturers conducted by the National Electrical Manufacturers Association (NEMA), Rosslyn, Va.
NEMA members continued to view current business conditions as highly favorable in May, but their evaluation of near-term growth prospects has deteriorated dramatically over the last two months.
Although the breadth and intensity of positive sentiment regarding the current North American market decelerated slightly in comparison to April, NEMA said the comments of many respondents showed an exuberance rarely seen in the history of the EBCI survey. Several manufacturers said May orders were running 15 percent to 20 percent ahead of April.
However, survey respondents were not as bullish about future market conditions. The EBCI for future North American conditions fell sharply to 26.9, reflecting the now widespread view that business conditions at year-end will be weaker to at least some degree. As recently as March, the EBCI for future North American conditions measured in the high 50s.
Said one NEMA member, “The first four to five months of the year have been so good that it's hard to believe the last seven-to-eight months could be equally as robust. Higher interest rates are beginning to bite and metals prices (especially copper) are going nuts!”
Said another respondent, “Astronomically high metal prices and high commodity prices are creating some speculative behavior that will not be sustained. These high prices must find an outlet in inflation sooner or later.”
Another manufacturer was concerned with rising interest rates, rising fuel costs, rising raw material costs and the impact these factors will have on capital spending and construction projects.
Vital Statistics
CONSTRUCTION
New Construction Put-in-Place ($/billions, SAAR)
Apr. '061
Mar. '062
Mo. % Change
Apr. '05
YTY % Change
Total Construction
1,195.9
1,197.3
0.1
1,102.1
8.5
Total Private Construction
933.3
934.2
-0.1
859.4
8.6
Residential (inc. Improvements)
657.1
664.6
-1.1
613.3
7.1
New single family
451.2
458.5
-1.6
404.8
11.5
New multi-family
53.3
52.8
1.0
44.4
19.9
Lodging
15.7
14.3
9.8
12.8
23.3
Office
39.8
38.7
3.0
35.0
13.8
Commercial (inc. Farm)
71.1
69.8
1.8
66.7
6.5
Health Care
30.7
30.6
0.4
27.0
13.9
Educational
13.9
14.0
-0.9
13.0
6.6
Religious
8.3
8.2
1.7
7.8
6.7
Amusement and Recreation
9.3
8.9
5.3
8.2
13.3
Transportation
8.5
8.3
1.7
6.4
33.3
Communication
16.1
16.2
-0.7
14.4
11.4
Power (inc. Gas and Oil)
25.1
25.5
-1.9
25.1
0.0
Electric
16.8
17.4
-3.0
16.0
5.2
Manufacturing
36.3
33.6
8.0
28.4
27.8
Public construction ($/billions)
262.6
263.1
-0.2
242.7
8.2
Residential
7.4
7.2
3.6
6.6
11.7
Office
11.1
10.9
2.0
11.8
-6.3
Commercial
4.9
4.9
-1.3
5.1
-4.8
Health care
8.5
8.6
-0.6
8.1
5.2
Educational
67.5
68.3
-1.2
64.6
4.5
Public safety
10.5
10.6
-1.5
8.9
16.9
Amusement and recreation
11.7
12.0
-2.4
10.5
11.5
Transportation
21.0
20.6
2.1
19.4
8.3
Power
9.4
9.1
3.4
7.7
22.4
Highway and street
72.9
72.6
0.4
65.8
10.7
Sewage and waste disposal
19.2
19.8
-2.9
16.8
14.2
Water supply
12.4
12.5
-0.7
12.0
2.9
Conservation and development
5.5
5.5
0.8
4.8
16.1
Housing starts (SAAR)
Apr. '061
Mar. '062
Mo. % Change
Apr. '05
YTY % Change
Total (millions of units)
1.849
1.996
-7.4
2.079
-11.1
Single-family (millions of units)
1.535
1.626
-5.6
1.680
-8.6
Multi-family (thousands)
262
333
-21.3
351
-25.4
EMPLOYMENT WAGE & PRICE STATISTICS
Mo.
Latest Month
Mo. % Change
Year ago
YTY % Change
Employment, Electrical Contractors (thousands)
869.5
MAR
0.5
841.9
3.3
Hourly wage, Electrical Contractors ($$$)
21.87
MAR
0.0
21.49
1.8
Copper prices (cents per pound)
371.62
MAY
23.5
151.99
144.5
INDUSTRIAL MARKET
Mo.
Latest Month
Mo. % Change
Year ago
YTY % Change
Electrical Mfrs' Shipments ($/billions)
3.285
MAR
-1.6
2.910
12.9
Electrical Mfrs' Inventories ($/billions SA)
4.653
MAR
1.0
4.282
8.7
Electrical Mfrs' Inventory-to-Shipments ratio
1.416
MAR
2.6
1.471
-3.7
Electrical Mfrs' New Orders ($/billions SA)
3.308
MAR
-6.7
2.948
12.2
Machine tool orders ($/millions)
351.7
MAR
27.8
274.6
28.1
Industrial Capacity Utilization (Percent, SA)
81.9
APR
0.5 pts.
79.7
1.9 pts.
Purchasing Managers Index (Percent)
54.4
MAY
-2.9 pts.
51.8
2.6 pts.
Footnotes: 1-Preliminary; 2-Revised; 3-Includes residential improvements; Z -less than 0.005 percent. SA - seasonal adjusted; SAAR - seasonally adjusted annual rate. Sources: Construction Put-in-Place statistics - Department of Commerce; Housing starts - Department of Commerce's Census Bureau; Electrical contractor employment numbers and hourly wage - Department of Labor; Copper prices - Metals Week; Electrical manufacturers' shipment data - Department of Commerce; Machine Tool Orders - Association for Manufacturing Technology; Industrial Capacity of Utilization - Federal Reserve Board; and Purchasing Managers Index - Institute for Supply Management.
Note: Additional economic data relevant to the electrical industry is available on a bi-weekly basis by subscribing to Electrical Marketing newsletter. For subscription information seewww.electricalmarketing.com.
