NEMA business confidence survey shows rebound
Current conditions across all four regions included in the National Electrical Manufacturers Association’s (NEMA) Business Confidence Survey topped the growth threshold of 50 points for the third consecutive month in March.
The North America index climbed nearly five points to 60.4 following a dip in February and marked its 23rd consecutive month at a value of 50 or higher. The Latin America index advanced 10 points from February to 66.7 and has indicated conditions favorable to growth in that market since August 2003. Confidence in current conditions in both Europe and the Asia/Pacific region lost ground in March. The Europe index fell nearly four points to 54.5, while the Asia/Pacific index slid nearly seven points to 63.3.
The Electroindustry Business Confidence Index indices gauge the business confidence of the electroindustry in Asia, Europe, North America, and Latin America, and are based on the results of a monthly survey of senior managers at NEMA member companies. Those companies represent more than 80% of the electroindustry.
Expectations for future conditions remained optimistic on balance in March. Of the four regional indexes, only Europe’s failed to reach 50 points, falling significantly to 45.8. The Latin America index grew by nearly seven points to a reading of 70. Meanwhile, expectations for conditions in six months in both North America and the Asia/Pacific region, while remaining firmly in growth territory, lost some ground in March. The North America index slipped 6.6 points to a still robust 72, while the Asia/Pacific index was off nearly eight points at 60.
Raw materials and energy prices are again at the forefront of NEMA member company executives’ thoughts on the current state of business conditions in the electroindustry. Nearly half of the respondents who submitted comments on current conditions in response to the March Business Confidence Survey mentioned rising material prices in some form. Several participants expressed concern over the impact on margins of commodity costs, while another predicted that “…$50 oil will definitely reduce GDP growth around the world.”