EBCI for Current Conditions Falls Again and Now Points to Negative Growth

Aug. 27, 2010
NEMA's Electroindustry Business Confidence Index (EBCI) for current North American business conditions plummeted in the latest month, falling nearly 18

NEMA's Electroindustry Business Confidence Index (EBCI) for current North American business conditions plummeted in the latest month, falling nearly 18 points. With the August performance coming on the heels of a decline of nearly seven points in July, the index has now fallen by more than 24 points in the space of only two months — from 70.4 points in June to 46 points currently. Any reading above the 50-point level is indicative of growth in the market. The EBCI is a survey of senior executives of the National Electrical Manufacturers Association (NEMA), Rosslyn, Va.

The sub-50 point value — only the second recorded since July 2009 — indicates that across the electrical market more businesses than not saw conditions deteriorate during the month. Indeed, only 24 percent of survey panelists reported that business conditions improved in August compared to a month earlier, versus 38 percent in July and 48 percent in June. By contrast, 36 percent reported conditions worsened in August, compared to 12 percent and 7 percent in June, respectively. Meanwhile, the survey's measure of the intensity of change in current North American conditions suggests that the decreasing pace of improvement seen in recent months came to a halt in August.

The EBCI for future North American conditions posted its third consecutive decline, dropping slightly to 54 points in August from 57.7 points in July. The index had climbed as high as 77.1 points in May, its top level in more than five years. Despite its summer-long downslide, the index continues to indicate, if by a shrinking margin, that more panelists do not expect an improvement in the business environment over the next six months.

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