NEMA's Electroindustry Business Confidence Index (EBCI) for current North American conditions measured 53.6 in June, its 39th consecutive month above the 50-point threshold indicating conditions favorable to growth. Although the index declined in June, the drop was a modest one — only 2.2 points from May's reading of 55.8 points. The EBCI is a monthly survey of electrical manufacturers conducted by the National Electrical Manufacturers Association (NEMA), Rosslyn, Va.
Meanwhile, the index for future North American conditions rose slightly from last month's low-water mark, climbing 0.9 points to 27.8. The business environments in each of the other world regions included in the survey were somewhat stronger. Current conditions in Latin America, Europe and the Asia/Pacific region all posted strong readings in the low 60s, while future conditions measures for each of these regions reached or exceeded 50.
NEMA members' views of North American current and future business conditions changed little from last month. At least two electrical manufacturers are still delighted with current business conditions. Said one respondent, “June started out substantially better than May, which was a terrific month.” Another manufacturer said, “June is starting out like a house afire.”
However, many respondents expect to see moderation in the rate of growth over the next few months. Said another manufacturer, “The rate of bookings has slowed in all product lines. It was to be expected after the torrid first third of the year.”
Although panelists were encouraged to see copper prices stabilize, they still expect a turbulent market for copper and other key commodities in the near future. They also expect moderate inflation to temper future growth and are watching interest rates closely.
“Interest rates will dictate the severity of softening in residential construction,” said a manufacturer. “Commercial construction activity is expanding, but it's not expected to offset the overall expected slowdown in residential construction.”
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)
May '061
Apr. '062
Mo. % Change
May '05
YTY % Change
Total (millions of units)
1.957
1.863
5.0
2.034
-3.8
Single-family (millions of units)
1.586
1.553
2.1
1.717
-7.6
Multi-family (thousands)
321
256
25.4
280
14.6
EMPLOYMENT WAGE & PRICE STATISTICS
Mo.
Latest Month
Mo. % Change
Year ago
YTY % Change
Employment, Electrical Contractors (thousands)
871.1
APR
0.2
848.1
2.7
Hourly wage, Electrical Contractors ($$$)
21.96
APR
0.4
21.49
2.2
Copper prices (dollars per pound)
3.46
JUN
-8.8
1.66
108.6
INDUSTRIAL MARKET
Mo.
Latest Month
Mo. % Change
Year ago
YTY % Change
Electrical Mfrs' Shipments ($/billions)
3.193
APR
1.3
2.813
13.5
Electrical Mfrs' Inventories ($/billions SA)
4.433
APR
1.4
3.999
10.9
Electrical Mfrs' Inventory-to-Shipments ratio
1.388
APR
0.1
1.422
-2.3
Electrical Mfrs' New Orders ($/billions SA)
3.552
APR
11.8
2.831
25.2
Machine tool orders ($/millions)
255.1
APR
-27.7
238.9
6.8
Industrial Capacity Utilization (Percent, SA)
81.7
MAY
-0.2 pts.
79.8
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.
