NEMA announces fall in lighting index for Q4 2007.
Press Release Summary:
NEMA's Lighting Systems Index fell sharply to close out 2007, contracting 6% between Q3 and Q4. Sales were seasonally weak for fixtures and miniature lamps, but contracted significantly for large lamps as a result of shrinking incandescent demand. The U.S. housing market downturn is having a very noticeable impact on demand for lighting equipment. However, nonresidential construction activity by comparison continues to increase at a solid rate.
Original Press Release:
Lighting Index Tumbles During Fourth Quarter of 2007
NEMA's Lighting Systems Index fell sharply to close out 2007, contracting 6 percent between the third and fourth quarters. On a year-over-year basis, the index registered a modest 0.5 percent gain, but only due to the fact that the reading from the fourth quarter of 2006 was very weak. In terms of the lighting index's underlying components, sales were seasonally weak for fixtures and miniature lamps, but contracted significantly for large lamps as a result of shrinking incandescent demand. On a year-over-year basis, only large lamps posted a drop in shipments-again, stemming from market shifts away from incandescents to compact fluorescents.
The U.S. housing market's downturn is having a very noticeable impact on demand for lighting equipment and will continue to weigh on shipments going forward. Indeed, during the fourth quarter of 2007, single-family housing starts fell to their lowest quarterly total since the beginning of 1991 and have fallen by more than half from their peak set in the first quarter of 2006. Recent readings on building permit issuance suggest there is more room for construction activity to fall. Ultimately housing starts could post their largest peak-to-trough decline since the bust of the early 1980s.
Nonresidential construction activity by comparison continues to increase at a solid rate, offsetting the weak housing market's weight on lighting equipment demand. During the fourth quarter of 2007, real business investment in commercial, industrial, and other nonresidential structures jumped by an average annualized pace of 20 percent and reached its highest level since the latter days of the previous economic expansion. Concern, though, is growing over economic growth prospects and weakening business confidence, and nonresidential construction spending will likely tail off, but the overall decline should be modest due to the healthy situation of business balance sheets.
The NEMA Lighting Systems Index is a composite measure of NEMA-member companies' U.S. shipments of a variety of lighting products, including lamps, luminaire, ballasts, emergency lighting, and exit signs. Product shipments data are drawn from NEMA statistical surveys and are adjusted for inflation and seasonal fluctuations.
NEMA is the trade association of choice for the electrical manufacturing industry. Founded in 1926 and headquartered near Washington, D.C., its approximately 450 member companies manufacture products used in the generation, transmission and distribution, control, and end-use of electricity. These products are used in utility, medical imaging, industrial, commercial, institutional, and residential applications. Domestic production of electrical products sold worldwide exceeds $120 billion. In addition to its headquarters in Rosslyn, Virginia, NEMA also has offices in Beijing, São Paulo, and Mexico City.
Contact
Brian Lego
Director, Economic Analysis
(703) 841-3295
bri_lego@nema.org
