Industrial control shipments surge
NEMA’s Primary Industrial Controls Index increased 7% between the first and second quarters of 2007 up 8.6% year-over-year.
NEMA’s Primary Industrial Controls Index increased 7% between the first and second quarters of 2007. On a year-over-year basis, the index is up 8.6% and has reached its highest point of the current business cycle. The Primary Industrial Controls and Adjustable Speed Drives index, a broader measure of demand for industrial control equipment, climbed 5% on a quarter-to-quarter basis. Compared to the second quarter of 2006, the combined index rose 9.7% and has increased on a year-over-year basis in each of the last 15 quarters.
The sharp quarterly increase in shipments of industrial controls was expected given the upbeat second quarter reading on real GDP growth. Following a sluggish 0.6% annualized gain during the first quarter, aggregate economic growth clocked in at a 3.4% annualized rate of gain. Furthermore, if not for the significant drag imposed by the flagging residential construction sector, the second quarter reading would have been higher. Real GDP growth received a boost from inventories, increased federal government spending, improved balance of trade and continued gains in business investment. The bulk of the past quarter’s gain in business investment came from nonresidential construction activity, but capital spending on software and equipment still managed a modest increase of 2.1% annualized.
The overall picture for the U.S. manufacturing sector, and electroindustry, remains largely positive. After sagging at the beginning of the year, industrial output has increased in each of the past four months. Also, the ISM index, though slipping in July, has remained in expansionary territory for six consecutive months. Although capital spending is expected to remain at a healthy level through the remainder of 2007, it will likely begin to lose some steam as the economic expansion matures further. Corporate profits remain close to record highs, but their growth has clearly slowed during the past few quarters. In addition, many businesses are beginning to wrap up major capital spending projects. When combined with the recent instability in the equity and credit markets, businesses are expected to rein in plans for investment spending after current projects come to a close. As a result, shipments of industrial control equipment have likely reached a cyclical peak and will see only modest growth over the near-term.
The Industrial Control Business Indices are issued quarterly by NEMA. 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 this data has 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, a $2.6 billion U.S. market, is primarily used in industrial applications for the control or regulation of power utilization apparatus, including motors.
- Events & Awards
- Magazine Archives
- Oil & Gas Engineering
- Salary Survey
- Digital Reports
- Survey Prize Winners
- CFE Edu
Annual Salary Survey
Before the calendar turned, 2016 already had the makings of a pivotal year for manufacturing, and for the world.
There were the big events for the year, including the United States as Partner Country at Hannover Messe in April and the 2016 International Manufacturing Technology Show in Chicago in September. There's also the matter of the U.S. presidential elections in November, which promise to shape policy in manufacturing for years to come.
But the year started with global economic turmoil, as a slowdown in Chinese manufacturing triggered a worldwide stock hiccup that sent values plummeting. The continued plunge in world oil prices has resulted in a slowdown in exploration and, by extension, the manufacture of exploration equipment.
Read more: 2015 Salary Survey