The situation on the ground was little changed since last month, but that left major headwinds still facing electrical manufacturers. Commenters mentioned concerns about inflation and supply chain problems that were further exacerbated by China’s lockdown of its largest city and one of its busiest ports, Shanghai, in an attempt to clamp down on rising COVID cases. The share of respondents that reported better conditions increased in April, but the proportion that noted worse conditions ticked up as well. The net effect was a modest shift from an overall “unchanged” reading of 50 in March to one of slow growth expansion at 54.2 in April.  EBCI results 202204nm

As electrical manufacturers contended with ongoing supply chain difficulties and rapidly rising inflation, Russia launched the most significant armed conflict on the European continent since WWII. Although mounting challenges facing the industry no doubt contributed to a softening of the current conditions component, which slid from 66.7 in February to 50 this month, continued strong demand arguably prevented the reading from sliding into contraction territory.  EBCI results 202203nm

The current conditions component recorded the highest reading since last spring, coming in at 66.7 points in February. The 20-point swing was propelled by a sharp increase in the proportion of respondents that reported “better” conditions, even as “worse” responses dropped to zero. Comments painted a picture of robust demand, as evidenced by strong orders activity, hampered by transportation and other supply chain difficulties, with one commenter summing up the situation: “Record quotations and orders, now if we could only ship the stuff.”   EBCI results 202202nm

For the second time in four months, the current conditions component dipped below 50, suggesting at least a momentary decline in confidence from the EBCI panel. Although most panel members indicated “unchanged” conditions, the share of “worse” responses increased in January, pulling the gauge down to 46.4 this month from its December reading of 56.7. Many concerns shared by commenters involved supply side difficulties such as workforce and supply chain problems exacerbated by the Omicron-driven wave of SARS CoV-2 infections, but one comment alluded to weakening demand as well. EBCI results 202201nm