NEMA’s industrial control index increases 10% in 4Q04
Rosslyn, VA—The National Electrical Manufacturers Association (NEMA) reports that its Primary Industrial Control Index gained almost 10% to reach 87.3 points in 2004’s fourth quarter (4Q4) compared to a year earlier (4Q03), even though it slipped nearly 4% from the previous quarter (3Q04).
Rosslyn, VA— The National Electrical Manufacturers Association (NEMA) reports that its Primary Industrial Control Index gained almost 10% to reach 87.3 points in 2004’s fourth quarter (4Q4) compared to a year earlier (3Q03), even though it slipped nearly 4% from the previous quarter (3Q04), which was mostly due to a typical seasonal slowdown. The control index averaged 83.1 points in 2004, which was its highest annual average since its related markets peaked in 2000.
Similarly, the organization’s Primary Industrial Control and Adjustable Speed Drive Index experienced a seasonal dip compared to the prior quarter. However, it also increased by more than 7% from the same period a year earlier. Although it only started in 2001, this index averaged 103.6 points in 2004, which was its highest annual value ever.
NEMA reports that higher interest rates constituted the only discernable drag on both indexes because other factors, such as capacity utilization and production of industrial machinery, improved steadily throughout 2004. In addition, three-month U.S. Treasury bill rates averaged nearly 1/4 point higher in 2004 than in 2003, while the rate of increase accelerated in the second half of the year. From 4Q03 to 4Q04, the three-month rate jumped from 0.92% to 2%. With the Federal Reserve expected to continue tightening monetary policy to keep inflation from re-emerging, NEMA projects that the interest rate environment is likely to serve as a mild damper on growth over the next several quarters.
Meanwhile, the factory-operating rate grew throughout 2004, averaging 76%, or nearly three percentage points higher than in 2003. While capacity utilization is not expected to improve as quickly as in 2004, it is still expected to continue to grow through 2006. Finally, production of industrial machinery grew a remarkable 14.4% in 2004 and is forecasted to improve at a strong, though not quite so rapid, pace for the foreseeable future.
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 Drive Index provides a broader measure of the industrial control marketplace. Industrial control equipment is a $2.6-billion U.S. market, and primarily consists of devices and equipment used in industrial applications for controlling or regulating power utilization apparatus, including motors.
This index represents monthly sales information collected by NEMA from its members, which include the major industrial control manufacturers in the U.S. Detailed information is only available to NEMA members. The data underlying these indices represent more than 90% of U.S. sales of this equipment.
Control Engineering Daily News Desk
Jim Montague, news editor
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