Electroindustry Conditions Continue Deterioration; Some Measure of Stability Expected by Late Summer, However

After gaining ground for two straight months to start the year, NEMA’s Electroindustry Business Confidence Index (EBCI) for current conditions slipped slightly in March, declining to 26 points from 27.3 a month ago. Though it remained near February’s recent high water mark, the index continued to signal a protracted period of very poor business conditions. Indeed, March’s reading was the 16th in a row to lag the “break even” mark of 50 points.

The Electroindustry Business Confidence Index gauges the business confidence of the electroindustry in Asia, Europe, North America, and Latin America, and is based on the results of a monthly survey of senior managers at NEMA member companies. Those companies represent more than 80 percent of the electroindustry.

On a more encouraging note, the EBCI for future North American conditions posted a sizable gain in March, jumping 15.6 points from February to 52. That performance marked the index’s first foray above the 50 point growth threshold since August 2007. While this result hardly presages a return to the vibrant electroindustry growth of 2004 to mid-2008, it does imply that that the balance of the survey panel expects a mild improvement in the absolute level of business conditions over the next six months, thus providing an early sign that the electroindustry may at least be in sight of bottom.

Craig DiLouie

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