NEMA’S industrial control indices rise slightly in 2Q03

Rosslyn, VA— Recent reports showing improvement in the U.S. economy appear to be proving favorable for many industrial control manufacturers. For example, the National Electrical Manufacturers Association ’s (NEMA) Primary Industrial Control Index reported Aug. 8 that sales activity increased by one-half a point in the second quarter of 2003 (2Q03), reaching an index value of 72.4.

After feigning recovery in 2002’s first half, the primary index dropped to its short-term low point of 69.4 in 4Q02. However, even with the modest improvement the index reflected in 2003’s first half, 2Q03 was still down nearly 10% from the same period last year. Domestic shipments of electrical products within NEMA’s scope exceed $100 billion.

Similarly, NEMA’s Primary Industrial Control and Adjustable Speed Drives Index, the complementary index used to track industrial control and adjustable speed drive shipment activity, also recorded moderate improvement in 2Q03, up two points from the 1Q03 level, reaching 95.6. Although the Primary Industrial Control and Adjustable Speed Drives Index has had two consecutive positive quarters, it remains 5% below the level reached in 2002.

‘Following two months of decline, the Federal Reserve reports that the production of industrial machinery and manufacturing capacity utilization improved during the month of June,’ says Steve Wilcox, NEMA’s market research director. ‘Additionally, the Institute for Supply Management’s manufacturing Purchasing Managers Index (PMI) broke above 50, which is the benchmark value that points to an expanding economy, for the first time since February. This survey result was bolstered by news from the Census Bureau that factory orders in June were stronger than originally reported.

“Conversely, the state of nonresidential construction remains fragile, and new construction of manufacturing facilities continues to weaken. Preliminary figures for June 2003 indicate that the seasonally adjusted annual rate of industrial construction fell 22 percent compared to the same period in 2002.’

NEMA issues its Industrial Control Business Indices quarterly. The Primary Industrial Control Index represents U.S. shipments for motor starters, contactors, terminal blocks, control circuit devices, motor control centers, sensors, programmable controllers, and other industrial control devices. Because these data have been collected for some time, the primary index illustrates the market’s trend over several years.

In 2001, the NEMA data collection program was expanded to include adjustable speed drives, a key energy-saving industrial component. The Primary Industrial Control and Adjustable Speed Drives Index provides a broader measure of the industrial control marketplace. Industrial control equipment, a $2.6 billion U.S. market, is primarily used in industrial applications for the control or regulation of power utilization apparatus, including motors.

This index represents monthly sales information collected by NEMA from its members, the major industrial control manufacturers in the U.S. market. The data underlying these indices represent more than 90 percent of U.S. sales of this equipment.

Control Engineering Daily News DeskJim Montague, news editorjmontague@reedbusiness.com

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