NEMA's Electroindustry Business Confidence Index (EBCI) for current North American conditions declined for the fourth month in a row in August and, at 46.2, is now below the 50-point threshold indicating conditions favorable to growth. For the past 39 months — more than three years — the EBCI index had topped the 50-point mark. The EBCI is a monthly survey of electrical manufacturers conducted by the National Electrical Manufacturers Association (NEMA), Rosslyn, Va.
The EBCI Future Conditions Index for North America also declined, sliding to 17.3 points, from 23.2 points in July. EBCI respondents said conditions were better outside North America. NEMA said some factors contributing to the decline in the EBCI were a nationwide housing market correction, continued upward pressure on interest and inflation rates, and an ever-turbulent Middle East. However, the trade association urged caution in interpreting this month's EBCI because although electrical industry shipments were off slightly in June, they still outpaced their year-ago level by more than 12 percent. NEMA said the electrical industry has experienced significant growth over the last three years, and was likely entering a period of moderation. Said one EBCI panelist, “We see things settling a bit in the next six months — nothing alarming.”
Another manufacturer reported a 10-percent decline in year-to-date trends in all its business units in July, and a slowdown in its residential business. However, the respondent said business had picked up in August, although not to the same level as in the first six months of 2006. On the flip side, some manufacturers still reported solid sales. “August has started off gangbusters,” said one NEMA member. “Daily incoming order rate is running 15 percent ahead of July, which was an excellent month.”
However, it seems most EBCI respondents sense a change in business conditions. One NEMA member saw potential trouble because of higher interest rates and inflation. “The Middle East situation is undermining the confidence crucial to sustain strong economic activity into the future,” said the manufacturer.
Vital Statistics
CONSTRUCTION
New Construction Put-in-Place ($/billions, SAAR)
July '061
June '062
Mo. % Change
July '05
YTY % Change
Total Construction
1,199.9
1,214.2
-1.2
1,141.2
5.1
Total Private Construction
930.9
943.2
-1.3
895.5
4.0
Residential (inc. Improvements)
627.4
640.5
-2.0
646.6
-3.0
New single family
412.1
424.9
-3.0
438.3
-6.0
New multi-family
56.3
55.4
1.6
49.0
14.9
Lodging
21.0
21.5
-2.5
11.6
80.6
Office
45.1
42.8
5.5
34.9
29.3
Commercial (inc. Farm)
77.2
77.3
-0.1
67.8
13.8
Health Care
32.0
32.0
0.2
28.3
13.3
Educational
13.3
13.4
-0.7
12.8
3.6
Religious
8.2
8.4
-2.1
7.9
2.9
Amusement and Recreation
9.0
8.9
0.0
7.0
27.0
Transportation
9.5
9.4
2.0
7.1
35.0
Communication
15.0
15.3
-2.2
13.3
12.1
Power (inc. Gas and Oil)
34.7
33.7
2.8
27.1
27.8
Electric
23.5
23.6
-0.6
18.7
25.8
Manufacturing
37.4
38.6
-3.1
29.6
26.3
Public construction ($/billions)
269.1
271.1
-0.7
245.8
9.5
Residential
9.2
9.4
-2.5
8.2
12.1
Office
11.0
11.0
-0.8
10.7
2.2
Commercial
3.8
3.7
1.6
4.5
-16.1
Health care
9.8
9.7
0.4
8.9
9.1
Educational
69.9
69.2
1.0
66.8
4.6
Public safety
10.3
10.5
-1.8
9.6
7.3
Amusement and recreation
13.4
13.5
-0.6
11.2
20.0
Transportation
21.1
21.3
-0.7
19.2
10.1
Power
6.6
8.2
-19.0
8.7
-23.5
Highway and street
76.6
77.0
-0.6
64.8
18.2
Sewage and waste disposal
19.0
18.9
0.2
16.7
13.3
Water supply
12.3
12.6
-2.2
10.9
12.7
Conservation and development
5.6
5.5
1.2
5.0
10.1
Housing starts (SAAR)
July '061
June '062
Mo. % Change
July '05
YTY % Change
Total (millions of units)
1.795
1.841
-2.5
2.070
-13.3
Single-family (millions of units)
1.450
1.486
-2.3
1.740
-16.6
Multi-family (thousands)
264
312
-15.4
294
-10.2
EMPLOYMENT WAGE & PRICE STATISTICS
Mo.
Latest Month
Mo. % Change
Year ago
YTY % Change
Employment, Electrical Contractors (thousands)
891.9
JUN
1.8
869.2
2.6
Hourly wage, Electrical Contractors ($$$)
22.26
JUN
1.0
21.66
2.8
Copper prices (cents per pound)
3.65
AUG
-0.3
175.85
107.7
INDUSTRIAL MARKET
Mo. %
Latest Month
Mo. Change
Year ago
YTY % Change
Electrical Mfrs' Shipments ($/billions)
3.210
JUN
-1.8
2.889
11.1
Electrical Mfrs' Inventories ($/billions SA)
4.660
JUN
3.2
4.018
16.0
Electrical Mfrs' Inventory-to-Shipments ratio
1.452
JUN
5.1
1.391
4.4
Electrical Mfrs' New Orders ($/billions SA)
4.008
JUN
18.7
3.005
33.4
Machine tool orders ($/millions)
322.68
JUN
-0.4%
254.74
26.7
Industrial Capacity Utilization (Percent, SA)
82.4
JUL
0.1 pts.
80.2
2.2 pts.
Purchasing Managers Index (Percent)
54.5
AUG
-0.2 pts.
53.6
0.9 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.
