Demand for motors increased in the fourth quarter of 2012 as NEMA’s Motors Shipments Index grew 6.5 percent from the previous quarter. This improvement follows on the heels of a 17.3 percent decline posted in the third quarter. Since bottoming out in the second quarter of 2009, during the depths of the Great Recession, the index has climbed a cumulative 30.9 percent but has dropped below its pre-recession high for the last two quarters. Growth in the fractional horsepower segment of the motors market rebounded strongly in the first half of 2012 but plummeted in the third quarter and continued to fall in the fourth quarter of 2012 while integral horsepower motor shipments recorded a more moderate decline for the second consecutive month. The inflation adjusted dollar value of fractional horsepower motors shipments has increased by over a third between the second quarter of 2009 and the fourth quarter of 2012, while the value of integral horsepower motors shipments increased almost 2 percent over the same period.
The softening in the index has coincided with a slowdown in manufacturing activity. Although the sector experienced a surge in the first quarter of 2012, the rest of the year did not fare as well as factory production failed to top 2 percent in the last three quarters of 2012. Still, the forward-looking ISM manufacturing index for new orders hovered above the “break even” mark of 50 on average in the fourth quarter and suggests stronger improvement in the first half of 2013. Production growth is forecasted at 1.4 percent year-over-year for 2013, before picking up to over 3 percent in 2014 amidst stronger demand domestically and globally.
NEMA is the association of electrical equipment and medical imaging manufacturers, founded in 1926 and headquartered in Arlington, Virginia. Its member companies manufacture a diverse set of products including power transmission and distribution equipment, lighting systems, factory automation and control systems, and medical diagnostic imaging systems. Worldwide annual sales of NEMA-scope products exceed $120 billion.
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