Industrial control indices surge

Rosslyn, VA—Sales of industrial control products and systems, as measured in the National Electrical Manufacturers Association's (NEMA) Primary Industrial Controls Index, expanded by 4.8% in the second quarter of 2005 (2Q05).

08/16/2005


Rosslyn, VA— Sales of industrial control products and systems, as measured in the National Electrical manufacturers Association's (NEMA) Primary Industrial Controls Index, expanded by 4.8% in the second quarter of 2005 (2Q05). Compared to the same period a year earlier, the index increased by 4.6% in 2Q05. Overall, NEMA reports that its Primary Industrial Controls Index has posted year-over-year gains in 10 of the last 12 quarters, and is now more than 20% above the market’s low point observed at the end of 2001.

“These data very clearly indicate a turnaround for an industry that was hurt by the nation’s economic downturn,” says Brian Lego, NEMA's economic analysis director.

In addition, the organization’s Primary Industrial Control and Adjustable Speed Drive Index posted a sizable gain of 5.4% during 2Q05. Though increasing at a slightly more subdued pace of 4.8% when compared to the same period a year ago, the market remains very strong as the index registered a nearly 11% gain in 2Q04. This quarter’s figure marks the second highest reading in the index’s brief history, as well as a 22% gain in sales since 4Q02.

NEMA reports that rising short-term interest rates continue to pose a downside risk for sales of industrial control products and systems. For example, as recently as May 2004, rates for three-month U.S. Treasury bills were below 1%, but have increased by more than 200 basis points since then to 3.3%. With the U.S. Federal Reserve expected to continue raising the benchmark federal funds rate through the next several meetings, the nation’s interest rate environment reportedly is likely to serve as a mild damper on growth for the next several quarters.

NEMA adds that manufacturing activity is expected to remain a positive driver for industrial controls demand over the near term, but not quite to the same degree as in 2004. Capacity utilization rates reportedly have increased strongly since the end of the recession, as the U.S. and global economic recoveries gained momentum in 2003 and 2004. The rebound in manufacturing activity has been strong enough that certain industries are slated to see new capacity additions over the next several quarters, according to NEMA. Nonetheless, the organization adds that, since the U.S. economic expansion has settled into a stable pace of growth, further measurable gains in factory operating rates are unlikely.

In addition, NEMA says healthy demand for industrial machinery and equipment has bolstered demand for industrial automation systems. For example, real business investment in industrial equipment increased by 6.3% in 2Q05. “Output data for industrial machinery indicate an even more robust growth, as production increased 15% on an annualized basis in the second quarter,” says Lego. “Following the boom in industrial machinery production in 2004, output growth is expected to average nearly 7% during 2005 and 2006. Record profits will likely allow producers to replace old equipment or expand capacity, especially since so many companies pulled back sharply on industrial machinery investment during the recession.”

Control Engineering Daily News Desk
Control Engineering staff
controleng@reedbusiness.com





No comments
The Engineers' Choice Awards highlight some of the best new control, instrumentation and automation products as chosen by...
The System Integrator Giants program lists the top 100 system integrators among companies listed in CFE Media's Global System Integrator Database.
The Engineering Leaders Under 40 program identifies and gives recognition to young engineers who...
This eGuide illustrates solutions, applications and benefits of machine vision systems.
Learn how to increase device reliability in harsh environments and decrease unplanned system downtime.
This eGuide contains a series of articles and videos that considers theoretical and practical; immediate needs and a look into the future.
Robotic safety, collaboration, standards; DCS migration tips; IT/OT convergence; 2017 Control Engineering Salary and Career Survey
Integrated mobility; Artificial intelligence; Predictive motion control; Sensors and control system inputs; Asset Management; Cybersecurity
Big Data and IIoT value; Monitoring Big Data; Robotics safety standards and programming; Learning about PID
Featured articles highlight technologies that enable the Industrial Internet of Things, IIoT-related products and strategies to get data more easily to the user.
This article collection contains several articles on how automation and controls are helping human-machine interface (HMI) hardware and software advance.
This digital report will explore several aspects of how IIoT will transform manufacturing in the coming years.

Find and connect with the most suitable service provider for your unique application. Start searching the Global System Integrator Database Now!

Mobility as the means to offshore innovation; Preventing another Deepwater Horizon; ROVs as subsea robots; SCADA and the radio spectrum
Future of oil and gas projects; Reservoir models; The importance of SCADA to oil and gas
Big Data and bigger solutions; Tablet technologies; SCADA developments
Automation Engineer; Wood Group
System Integrator; Cross Integrated Systems Group
Jose S. Vasquez, Jr.
Fire & Life Safety Engineer; Technip USA Inc.
This course focuses on climate analysis, appropriateness of cooling system selection, and combining cooling systems.
This course will help identify and reveal electrical hazards and identify the solutions to implementing and maintaining a safe work environment.
This course explains how maintaining power and communication systems through emergency power-generation systems is critical.
click me