Robust market continues for industrial controls

NEMA’s Primary Industrial Controls Index increased 6.1% between the fourth quarter of 2005 and the first quarter of 2006, marking the 10th consecutive quarter of year-over-year growth in the index and its highest reading since the first quarter of 2001. “While a portion of this growth reflects a typical seasonal demand growth, market conditions for industrial automation and controls...
By Staff June 1, 2006

NEMA’s Primary Industrial Controls Index increased 6.1% between the fourth quarter of 2005 and the first quarter of 2006, marking the 10th consecutive quarter of year-over-year growth in the index and its highest reading since the first quarter of 2001.

“While a portion of this growth reflects a typical seasonal demand growth, market conditions for industrial automation and controls equipment clearly remain strong as sales jumped more than 12% compared to the same period a year ago,” said Brian Lego, NEMA’s director of economic analysis.

Concurrently, the Primary Industrial Controls and Adjustable Speed Drive Index touched a new all-time high for its five-year history. This broader index, which includes adjustable speed drives, posted a 5.8% quarter-to-quarter growth rate during the first quarter of 2006.

The near-term outlook for the U.S. manufacturing sector bodes well for industrial controls and adjustable speed drives. NEMA predicts business investment, in particular, to push manufacturing activity even higher during 2006.

For example, the degree to which capital spending on traditional goods (such as industrial controls) was depressed during the economic downturn suggests that the recent brisk pace of investment will continue as companies replace equipment. Recent profitability enjoyed by some companies have left businesses with more cash than anticipated; surveys indicate an increasing willingness on the part of managers to use these profits in an effort to expand capacity and invest in new equipment.

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. This index represents monthly sales information collected by NEMA from its members, reportedly the major industrial control manufacturers in the U.S. market. The data underlying these indices represent more than 90% of U.S. sales of this equipment.