Electroindustry Stock Index Declines in Third Quarter, 2006

NEMA’s Electroindustry Stock Index (ESI) dipped during the third quarter of 2006, following four consecutive quarterly gains. The index, which tracks the total returns of 8 NEMA member company common stocks, declined by 4.8 percent relative to the second quarter. Nevertheless, the ESI registered strong growth on a year-over-year basis, rising nearly 16 percent, and outpacing the gain 8.7 percent gain recorded by the S&P 500 Index over the same time period. The ESI also outperformed the S&P 500 over 3-year and 5-year time horizons.

NEMA's core Electroindustry Stock Index (ESI), tracks the capitalized stock value of several NEMA member companies whose primary business is manufacturing electrical products. The companies were selected for the ESI based on the following criteria:

1. A company must be domestically traded;         
2. At least 40 percent of a company's revenue must come from the sale of electroindustry products;         
3. A company must have a minimum $500 million average market capitalization for the trailing four quarters;         
4. A company's stock must have a minimum five year trading history.

The ESI is a market capitalization-weighted index, and is designed for tracking portfolio performances. The ESI can be compared to the S&P 500 Index, which it generally follows. The advantage of the ESI is that it only tracks companies that focus primarily on the electroindustry. Large highly diversified companies that have a preponderance of trade substantially in markets outside this industry are not included.