NEMA's Electroindustry Business Confidence Index (EBCI) for current North American conditions posted a sharp increase in February, climbing to 68.5 points from 55.2 points in January.
February's reading for the EBCI, a monthly survey of electrical manufacturers conducted by the National Electrical Manufacturers Association (NEMA), Rosslyn, Va., was the strongest since last September and the 34th in a row above the critical 50-point threshold indicative of favorable business conditions. At the same time, the February EBCI for future North American conditions slipped slightly to 53.6 points, down from 56.9 a month ago.
Current sentiment and future expectations for the other three world regions included in the EBCI survey remained firmly in positive territory for the fifth month in a row. Both current and future conditions indexes for Latin America saw healthy rebounds from sharp drops in January. Meanwhile, readings for both Europe and the Asia/Pacific retreated.
The strength of the electrical industry in February surprised a number of panelists. One electrical manufacturer said business was “extremely strong” in all markets and that his overall business was up 25 percent, while another panelist said, “We are expecting the strongest two-month start ever.”
One EBCI respondent said electrical distributors were being more cautious about inventory levels because pricing for commodities such as copper, steel and resins had softened, but overall, NEMA respondents seemed delighted with current business conditions.
The optimism apparent in the NEMA manufacturers' evaluation of current market conditions continued in their forecasts for future business, although some respondents were concerned about how the slowdown in the housing market could affect the U.S. economy, commodity pricing and the potential of higher interest rates. Said one panelist, “It will be interesting to watch Federal Reserve Bank actions under new leadership. Over-tightening still feels like a real risk for 2006.”
VITAL STATISTICS
CONSTRUCTION
New Construction Put-in-Place ($/billions, SAAR)
Jan. '061
Dec. '052
Mo. % Change
Jan. '05
YTY % Change
Total Construction
1,163.4
1,161.2
0.2
1,083.7
7.4
Total Private
906.9
905.3
0.2
853.3
6.3
Residential (inc. Improvements)
649.9
649.5
0.1
610.0
6.5
New single family
448.5
448.2
0.1
396.2
13.2
New multi-family
50.0
50.2
-0.5
44.5
12.4
Lodging
12.6
12.4
1.2
11.6
8.1
Office
36.6
36.7
-0.2
33.6
8.9
Commercial (inc. Farm)
70.3
70.0
0.4
64.2
9.5
Health Care
29.8
29.5
0.8
28.0
6.2
Educational
12.8
12.8
0.7
12.8
0.3
Religious
7.0
7.1
-1.1
8.1
-13.7
Amusement and Recreation
8.1
8.2
-1.3
8.3
-2.3
Transportation
7.5
7.4
1.2
6.5
14.8
Communication
15.3
14.1
8.7
14.7
4.5
Power (inc. Gas and Oil)
25.4
25.6
-0.6
27.0
-5.8
Electric
17.0
16.9
0.2
17.8
-4.6
Manufacturing
30.4
30.9
-1.4
27.3
11.3
Public construction ($/billions)
256.5
255.9
0.2
230.4
11.3
Residential
6.9
6.7
2.0
6.7
2.3
Office
11.0
10.9
0.7
12.1
-8.8
Commercial
5.0
4.8
3.6
4.6
9.1
Health care
7.9
8.1
-2.7
7.6
3.4
Educational
67.6
68.1
-0.8
59.6
13.5
Public safety
10.1
10.1
-0.3
9.0
11.6
Amusement and recreation
12.0
11.7
2.7
10.4
15.3
Transportation
20.2
20.4
-1.2
20.1
0.3
Power
8.3
8.1
2.5
8.2
1.9
Highway and street
68.9
68.3
0.9
61.2
12.7
Sewage and waste disposal
20.0
19.9
1.0
15.2
31.9
Water supply
12.0
12.2
-1.6
10.6
13.7
Conservation and development
6.0
5.8
3.4
4.7
26.0
Housing starts (SAAR)
Jan. '061
Dec. '052
Mo. % Change
Jan. '05
YTY % Change
Total (millions of units)
2.276
1.988
14.5
2.19
4.0
Single-family (millions of units)
1.819
1.613
12.8
1.77
2.8
Multi-family (thousands)
427
343
24.5
371
15.1
EMPLOYMENT WAGE & PRICE STATISTICS
Mo.
Latest Month
Mo. % Change
Year ago
YTY % Change
Employment, Electrical Contractors (thousands)
875.5
DEC
-0.7
863.10
1.4
Hourly wage, Electrical Contractors ($$$)
21.99
DEC
1.6
21.54
2.1
Copper prices (cents per pound)
231.24
FEB
4.2
150.64
53.5
INDUSTRIAL MARKET
Mo.
Latest Month
Mo. % Change
Year ago
YTY % Change
Electrical Mfrs' Shipments ($/billions)
3.128
DEC
-3.8
2.752
13.7
Electrical Mfrs' Inventories ($/billions SA)
4.493
DEC
0.3
4.148
8.3
Electrical Mfrs' Inventory-to-Shipments ratio
1.436
DEC
4.2
1.507
-4.7
Electrical Mfrs' New Orders ($/billions SA)
3.551
DEC
3.4
2.765
28.4
Machine tool orders ($/millions)
311.0
DEC
30.8
288.5
7.8
Industrial Capacity Utilization (Percent, SA)
80.9
JAN
-0.3 pts.
79.8
1.1 pts.
Purchasing Managers Index (Percent)
56.7
FEB
1.9 pts.
55.3
1.4 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.
