Panelists contributing to the NEMA Electroindustry Business Confidence Index (EBCI) were generally optimistic, but concerns remain about how long spiraling steel price increases will last.
The EBCI, a monthly survey of senior managers at member firms of the National Electrical Manufacturers Association (NEMA), Rosslyn, Va., rose 4 points to 75.9 for current conditions and 5 points to 84.5 for future conditions in North America.
All four regions posted current confidence index numbers above 50 in March (the threshold indicating conditions are favorable for growth), with North America, Latin America and Europe displaying increasing confidence. The Asia/Pacific current conditions index narrowed by approximately 5 points.
For the ninth straight month, optimism in future business conditions continued in all four regions, although the North and Latin American indexes both narrowed by about five points from February, reaching 84 and 71 points respectively in March.
Some respondents reported very strong business conditions, strong order activity, increased discretionary spending due to tax policy changes, and improvement in residential, telecom and commercial markets. However, at least one panelist expressed disappointment in the commercial sector, and another pointed out the continued weakness in the utility and industrial markets.
Said one respondent, “Our business is very strong in both the residential and commercial markets. Not sure if it's sustainable, but it sure is nice right now.”
Another manufacturer offered a more mixed report. “The telecom market continues to show signs of life, while the utility and industrial markets continue to be weak. Cautious optimism is appropriate for the second quarter of 2004.”
Business conditions will improve later this year , said one manufacturer. “But for business to really improve, investment in nonresidential structures is going to have to start showing some positive growth,” he said.