The high price of oil and other basic commodities continues to concern electrical manufacturers, 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.

Confidence in current conditions affecting the electrical industry did not appear to shift markedly from last month's levels. The North America EBCI index retreated a little more than one point to 55.2, while confidence in Europe broadened slightly from 56.3 to 56.7. A reading above 50 indicates conditions are favorable for growth.

Until last month, the North America EBCI future conditions index had remained at or above 70 points for nearly a year and a half. In September, however, the index contracted sharply to 58.3. That reading appears to have been a momentary blip as the October results revealed that the index had widened to 70.7.

By far the most frequently mentioned concern among respondents was the high price of oil and other commodities. Several respondents described the gap between raw materials prices and the price of finished goods as a major damper on industry growth.

Commenting on current conditions, one manufacturer said, “A slight weakening in demand coupled with continuing commodity price pressure is not exactly thrilling.”

Another respondent said although demand is solid, his company's growth has slowed. “With the impact of raw material prices and oil through the roof, I remain convinced the Fed better start focusing on stimulation.”

Manufacturers' comments on market conditions six months from now were mixed. One exec believes soft to static demand, continued commodity price inflation, and a weakening dollar caused by huge deficits does not bode well for the future. Another manufacturer was more optimistic.

“We continue to think that business conditions will be improved six months from now, although the rapid run-up in the price of oil and continued high metals prices are both detriments to that conclusion,” he said.

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