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Motors Shipments Stable in First Quarter of 2012


5/25/2012 10:54 AM

ROSSLYN, Va.,—Demand for motors remained stable for a second straight quarter during the first quarter of 2012 as NEMA’s Motors Shipments Index increased a modest 0.8 percent from the previous quarter. This stability follows on the heels of a 4.1 percent gain posted in the fourth quarter of the last year. Since bottoming out in the second quarter of 2009, during the depths of the Great Recession, the index has climbed a cumulative 47 percent – and has topped its pre-recession high for four straight quarters. Growth in the fractional horsepower segment of the motors market dipped below that of the integral horsepower segment in the second half of 2011, but rebounded in the first quarter of 2012. The inflation adjusted dollar value of fractional horsepower motors shipments increased by more than half between the second quarter of 2009 and the first quarter of 2012, while the value of integral horsepower motors shipments increased by almost a quarter over the same period.

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Motors shipments have benefited from strong manufacturing sector growth in recent months. Manufacturing experienced a surge of activity in the first quarter of 2012, in large part due to unseasonably warm weather in January and February, as evidenced by the 10.4 percent annualized increase in industrial production for manufactured goods. Beyond the short-term surge in production seen late last year into early this year, manufacturing activity is decelerating from its robust post-recession pace to a more sustainable level closer in line with long-run industry output trends, with output growth is seen tapering to an average of 3.4 percent in 2012 and 2013. The Institute of Supply Management’s purchasing manager’s index for the manufacturing sector grew slightly to 54.8 from 53.4. While the ISM maintains that any value for the PMI above 50 indicates that the manufacturing sector is growing, the first quarter data indicates growth, however it is still far below the levels reached in 2009/2010. Moreover, the new orders index grew almost four points to 58.2 in April, down three points from January’s 9-month high.

Recent data on durable goods orders point toward a slowing of the heretofore robust manufacturing recovery, with orders of durable goods trending downward over the last year. Overall, most of the incoming data indicates that manufacturing growth, one of the few bright spots in the recovery to date, is moderating amidst slow, but positive, progress in the U.S. economy and slowing of the global economy in general. Nonetheless, the electrical manufacturing industry is expected to advance at a steady annual pace over the next two years.

Contact: Tana Farrington, International Economist
Tana.Farrington@nema.org