Industrial controls shipments surge to seven-year high
The National Electrical Manufacturers Association’s Primary Industrial Controls Index increased 7% between the first and second quarters of 2007.
The National Electrical Manufacturers Association ’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, NEMA said. Following a sluggish 0.6% annualized gain during the first quarter, aggregate economic growth clocked in at a 3.4% annualized rate of gain. Had it not been for the significant drag imposed by the flagging residential construction sector, the second quarter reading could 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.
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