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Shipments of Industrial Control Equipment Weakened Further in the Fourth Quarter

03/1/2013 4:00PMSign-up to receive press releases.

NEMA’s Primary Industrial Controls Index decreased 1.6 percent on a quarter-to-quarter basis during the fourth quarter of 2012. However, the index stands 5.1 percent above its year-ago level and 43 percent above the cyclical trough observed in mid-2009. Nonetheless, inflation- and seasonally-adjusted shipments still remain below the pre-recession peak reached in 2007. The Primary Industrial Controls and Adjustable Speed Drives Index, a broader measure of industrial controls demand, also posted a slight decline during the fourth quarter of 2012, falling 0.3 percent following a 1.2 percent loss in the third quarter. However, the index increased 7.6 percent on a year-over-year basis.

The softening in the indexes 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. Industrial controls shipments are likely to see a similar trajectory.

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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