Manufacturing confidence: NEMA index reports choppy North American business conditions

-- Control Engineering, 12/31/2007

Rosslyn, VA — The Electroindustry Business Confidence Index (EBCI) for current North American conditions decreased from 52.2 to 47.8 in December. The National Electrical Manufacturers Association (NEMA) report shows a reversal in conditions from November, when survey results revealed the first month-to-month improvement since April. News from the future conditions index for North America was better.

NEMA EBCI indexes are measures of the diffusion of sentiment across the electrical manufacturing industry; a reading of more than 50 indicates conditions favorable to industry expansion and vice-versa. A companion measure, the mean degree of change in North American business conditions, registered 0 (on a scale ranging from –5 [deteriorated significantly] through 0 [stayed the same] to +5 [improved significantly]) for a second month, implying a mostly flat business environment since October, the organization explained.

Value of the index for future conditions increased in December to 45.7 from 37 in November; NEMA said the reading amounts to a forecast of continued modest deterioration in business conditions over the first half of 2008. December was the fourth consecutive month in which the future reading registered below 50.

Current and future conditions indexes for other world regions equaled or surpassed December’s growth threshold mark of 50, the organization said. The current conditions index for Latin America rose to 56.7; the future conditions index retreated to 63.3. Current and future European conditions indicators grew to 61.5 and 50, respectively. The current conditions index for Asia/Pacific climbed to 82.1; the future conditions index remained at 67.9.

Methods: EBCI indexes are based on the results of a monthly survey of senior managers at NEMA member companies and gauge the business confidence of the electroindustry in key regions. The number of respondents was 23, NEMA noted. Respondents are asked to indicate whether conditions are better, worse or unchanged (or not available).  Regions are North America, Latin America, Europe, and Asia/Pacific. The survey provides space for comments on current conditions.

Read prior NEMA financial predictions, from Control Engineering.

—Control Engineering News Desk
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