NEMAs Third Quarter 2003 Industrial Control Business Indices Flat

ROSSLYN, Va. -- News concerning the economy generally, and manufacturing in particular, has been largely positive recently. Preliminary figures indicate that the nation's gross domestic product grew at an annual rate of 7.2 percent in the third quarter, nonresidential construction investment increased by 2.5 percent from August to September, durable goods orders and shipments both improved for the fourth time in five months, and the Institute for Supply Management's manufacturing report was above the benchmark index value of 50 for the fourth straight month.

Despite the upbeat reports, both the Primary Industrial Control Index and Primary Industrial Control and Adjustable Speed Drive Index remained essentially flat in 2003's third quarter. The Primary Industrial Control Index edged up by one-half of one point over the upwardly revised second quarter value of 73.6, to reach an index value of 74.1 in the third quarter, but that improvement still leaves the index down nearly five percent from its level of one year ago. The Primary Industrial Control and Adjustable Speed Drive Index was up 1.7 points from the revised second quarter level, but the third quarter index value of 96.9 is approximately 3.5 percent lower than in the same period last year.

"A couple of economic indicators might help explain the seeming disparity between these modest index results and the robust state of the domestic economy," says NEMA's Steve Wilcox, director, market research.

"Industrial production of industrial machinery, which reached a high of over 130 points in the third quarter of 2000 and plunged rapidly to a trough of 83 points in the first quarter of 2002, has stagnated over the last two quarters after seeming to be on the verge of a recovery. Additionally, manufacturers are still saddled with a good deal of excess capacity as demonstrated by a factory operating rate that has yet to break through the 73 percent mark. As business investment continues to pick up and excess capacity is absorbed, the industrial control business indexes are likely to rebound as well."

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 (Figure 1). Because these data have been collected for some time, 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 Drives Index provides a broader measure of the industrial control marketplace.

Industrial control equipment, a $2.6 billion U.S. market, is primarily used in industrial applications for the control or regulation of power utilization apparatus, including motors.

This index 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. The data underlying these indices represent more than 90 percent of U.S. sales of this equipment. For more information, contact Walt Kozikowski, industry director, at (703) 841-3262. To download the images, visit the NEMA website.

NEMA is the leading trade association in the United States representing the interests of electroindustry manufacturers

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