The electroindustry experienced a month of relative stability in December, as the current conditions component edged up 7.7 points from November's reading to reach 50.0, a level indicating conditions had not changed from the previous month. This marked the fourth time the current conditions had hit the midpoint in the past calendar year. The modest uptick was driven by a slight increase in the share of panel members that reported “better” conditions while the majority of panelists noted “unchanged” conditions. Comments indicated that some respondents have seen pockets of growth, with "strong demand in key segments of the electrification transition," while others noted evident cooling in the residential market and slowing orders activity. One comment summarized the current situation as one in which "orders [are] slowing, but some of this is due to distributors right-sizing inventory and supply chain challenges improving."  EBCI results 202212nm

The current conditions component of the Electroindustry Business Confidence Index held steady at the mildly contractionary reading of 42.3 in November even as the share of respondents reporting “worse” conditions crept up this month. At 54 percent, the majority of panel members indicated that conditions remained “unchanged.” Some comments noted continued strong demand, but slower growth, attributed to interest rate hikes and lack of clarity from the Federal government, was already being felt by others.  EBCI results 202211nm

After spending two months straddling the line between better and worse conditions, the current conditions component slid into “worse” territory, posting a reading of 42.3 in October. Nearly 70 percent of respondents indicated “unchanged” business conditions, but an increased share of panelists reported “worse” conditions, which was more than sufficient to pull this month’s score down. Despite this component’s retreat to a mildly contractionary reading, a few comments noted continued solid demand as evidenced by strong orders activity. Longstanding concerns about supply chain problems and a still-tight labor market were joined by a mention of “elevated customer inventory levels” as factors that have helped to erode business conditions.  EBCI results 202210nm

In the midst of volatile swings in the stock market, rapid inflation, and a Federal Reserve campaign to knock down rising prices through swift and steep interest rate hikes, the electroindustry has settled into a position of relative calm, according to EBCI survey responses. For the third time in seven months, the current conditions index came in at 50 points in September, indicating that conditions were unchanged from the previous month. Indeed, nearly 70 percent of respondents reported “unchanged” conditions in the latest poll. Since January, the current component has averaged just under 50, suggesting a bias toward slower growth. Comments were quite mixed, with reports of continued strength in orders activity tinged with lingering concerns about supply chain disruptions. One comment expressed the confounding environment as one of “still strong demand with continued supply chain challenges.”  EBCI results 202209nm

Following three months of downbeat readings on business conditions facing the electroindustry, as measured by the current conditions component of the EBCI, sentiment reached 50 points, signaling unchanged conditions from the previous month. The more than six-point gain from July’s 43.8 was led by an uptick in the share of respondents that reported “better” conditions in August. However, the largest proportion of panel members continued to note “unchanged” conditions. Comments indicated that some respondents have seen pockets of growth in an otherwise slowing economy. In a striking change from comments submitted over the past 15 months, the only mention of supply problems in August’s current conditions commentary pointed to “minimal improvement in supply chain issues.”  EBCI results 202208nm

Despite eking out a slight increase from 40.6 in the prior month to 43.8 in July, the current conditions component remained range-bound in the low 40s for the third consecutive month. The collective indication from the panel suggests a plateauing of sorts as both the share of those who reported “better” conditions and those who pointed to “worse” conditions declined compared to June’s results, while the proportion of panel members that selected “unchanged” surged. Not surprisingly, many comments mentioned supply chain constraints, and while most of that commentary noted continued difficulties in that regard, a slight shift in sentiment may have gotten underway as more than one panelist described signs of improvement. Even with that glimmer of hope, inflation, inventory concerns, labor shortages, and recession fears served as a drag on business confidence.  EBCI results 202207nm

The current conditions component edged lower, staying below the no-change threshold level of 50 for the second consecutive month with a score of 40.6 in June. Somewhat counterintuitively, the June reading’s erosion came as a result of an increase in the proportion of respondents indicating “unchanged” conditions and despite a drop in the share of “worse” conditions. Much of the provided commentary could be considered mixed, with some panel members noting strong demand hampered by continued supply constraints. On the flip side, one commenter experiencing a reduction in demand characterized it positively because it allowed for catching up with backlogs.  EBCI results 202206nm

Confidence has become rather wobbly of late as the current conditions component fell below 50 for the second time this year and hit its lowest level since right after the end of the recession. An 11-point shift from last month left May’s current conditions reading at 42.9 as now more than one-third of respondents reported “worse” conditions during this survey period. Lockdowns in China and other ongoing supply chain problems have bedeviled electrical manufacturers. Now added to that mix, one commenter noted the deleterious effects soaring energy costs, especially in Europe, and U.S. tariffs are having on business conditions. Not all was negative, however, as some panel members noted their companies experienced better than expected orders activity.  EBCI results 202205nm

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