Electrical manufacturers are more bullish about the economic conditions in the electrical industry, according to the Electrical Business Confidence Index (EBCI), a monthly survey of senior executives at member firms of the National Electrical Manufacturers Association (NEMA), Rosslyn, Va.

For the first time since April 2004, confidence in current conditions affecting the electrical industry in North America expanded from the previous month, improving five points to 61.5 in November. A reading above 50 indicates conditions are favorable for growth.

Raw material costs again received most of the attention from NEMA manufacturers. The panel also saw some soft spots in the economy, primarily in the industrial and utility business segments. Otherwise, comments seemed to point to steady but not spectacular, economic growth following sluggish demand earlier in the year.

Said one respondent, “The market seems to have moved beyond the ‘soft patch’ that we experienced earlier in the third quarter. Year-over-year comparisons are not as spectacular as in the first half, however, because conditions were improving in the second half of last year.”

Future materials prices are the biggest concern for EBCI panel members. Although several respondents said they expect moderating price increases, most panelists did not expect the upward trend to ease over the next six months. More than one respondent noted persistent weakness in the U.S. dollar as a concern.

Additionally, some panelists expected interest rates to continue rising, leading to a slowdown in construction activity. On the positive side, nonresidential fixed investment, generally, and telecom, in particular, were expected to improve in the coming months.

Several panelists said events on the global stage will have an impact on future business conditions for the electrical industry. Said one panel member, “In six months I expect lower oil prices and a calmer Iraq. With those two improvements, the global economy should stabilize.”

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