NEMA’s Control Business Indices All Positive For Industrial Controls. Future Looks Bright, Too
Industrial control products and systems sales grew robustly for the second consecutive period as evidenced by NEMA’s Primary Industrial Control Index, which reached its highest level in three years at the end of the second quarter of 2004.
Improving by more than 11% compared to the same period last year, the second quarter primary index value of 82.1 also marks a 5% gain over the first quarter of 2004.
NEMA’s Primary Industrial Control and Adjustable Speed Drive Index also improved to 105 points in the second quarter—the second highest value for the index since the first quarter 2001 starting point. By this measure, says the report, the market has improved by 10% over its second quarter 2003 level and is up by nearly 3% from the first quarter of this year.
Production of industrial machinery, which had fallen precipitously throughout 2001 and 2002, began turning around toward the end of 2003. The first half of this year has seen growth of industrial machinery production rise by 6%, on a year-over-year basis, in the first quarter and 12% in the second quarter, said the NEMA findings.
The capacity utilization rate, which in the second quarter broke the 76% mark for the first time since early 2001, improved by more than three percentage points over the same period last year. As more facilities are brought on line, and as shifts are added to accommodate the higher operating rates, the need to replace worn-out industrial equipment and invest in new equipment will increase, reported NEMA.
“Several economic indicators, most notably reports on construction spending and the employment situation, pointed to a recent softening in the economy due, in large measure, to rising fuel prices,” said Steve Wilcox, NEMA’s director, market research. “However, the industrial sector, which had previously lagged other sectors of the economy, has continued its recent recovery, and that is good news to industrial control manufacturers.”
New orders for manufactured goods, which increased by more than 11% from June 2003 to June 2004, point to continued strength in the industrial market.
The NEMA 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. These data have been collected for some time, so 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.
The index represents monthly sales information collected by NEMA from its members, the major industrial control manufacturers in the U.S. market. NEMA claims that the data underlying these indices represent more than 90% of U.S. sales of this equipment.
