NEMA INDEX SHOWS SOME UNCERTAINTY ABOUT ECONOMY

The December 2003 NEMA Electroindustry Business Confidence Index (EBCI) reflects some uncertainty about current market conditions, although most respondents expect to see a general improvement in future business conditions.

For the second consecutive month, current conditions indexes of the EBCI, published monthly by the National Electrical Manufacturers Association (NEMA), Rosslyn, Va., have exceeded the growth threshold of 50 index points for all four global regions.

Index scores in North America and Asia Pacific weakened somewhat compared to last month. Confidence in the North American market contracted from 84 in November to 79 in December, and the current conditions index for Asia/Pacific moved from 75 to nearly 69 in December. Meanwhile, Europe held steady near 56 points and Latin America's index value expanded from 59 to 69.5.

For current conditions, respondents expressed uncertainty about the economy. That uncertainty may be a result of the unevenness Said one respondent, “There is definitely a noticeable increase in daily demand vs. six months ago. However, larger projects are still slow to be released.”

For six consecutive months, all four future conditions indexes remained above 50. Optimism for North America, which moved from 85 to 96, and Asia/Pacific, up 3 points to 78, expanded slightly in December. The breadth of expected confidence in Europe retreated marginally from 73 in November's survey to 70 for December. Although solidly positive, the breadth of confidence in future business conditions in Latin America contracted sharply from 83 to 69.

Cautious optimism remains the watchword for the near future. For the next six months, most respondents are expecting nonresidential construction to begin rebounding even though residential activity is expected finally to slow.