Seasonal weakness claimed for control index drop

02/10/2006


NEMA's Primary Industrial Controls Index declined 2.3% between the third and fourth quarter of 2005. The industry blamed the drop on a typical market weakness in the fourth quarter as opposed to any slowing in the industrial control market.

Compared to the fourth quarter of 2004, sales of industrial control products and systems jumped 7.2%, marking the ninth consecutive quarter of year-over-year growth in the Primary Industrial Controls Index. The index's annual average for 2005 was 87.7, more than a 5% gain versus 2004 and its highest reading since 2000.

The Primary Industrial Control and Adjustable Speed Drive Index fell 1.4% during 2005's fourth quarter. The decline likely stems from seasonal fluctuations, as sales growth on a year-over-year basis remained robust, rising more than 12% versus the fourth quarter of 2004. The index's annual average for 2005 set a new high since its inception in 2001, climbing more than 7% versus 2004.

"Manufacturing sector growth will remain a key source of demand for industrial controls and adjustable speed drives," says Brian Lego, NEMA's director, economic analysis. "During the fourth quarter of 2005, the factory-operating rate registered its highest reading since the third quarter of 2000 and total manufacturing output excluding high-tech industries increased to a new all-time high. Rebuilding Gulf Coast areas damaged by hurricanes will bolster goods production during the first half of 2006.

“Renewed inventory rebuilding will provide a measurable boost as well, as manufacturers ramp up production so that wholesalers and other businesses can replenish stocks,” said Lego. “Finally, the business investment environment will remain a positive factor for manufacturing activity, as near-record profits have left businesses flush with cash and ready to spend on industrial machinery and equipment."

The Industrial Control Business Indices represents monthly sales information collected by NEMA from its members, the major industrial control manufacturers in the U.S. market. Detailed information is only available to NEMA members. For more information, contact Walt Kozikowski, industry director, at (703) 841-3262 or wal_kozikowski@nema.org . To view the indices, visit the NEMA website





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