Association News

Demand for Motors decreased during first quarter of 2009.

Press Release Summary:

May 14, 2009 - NEMA's Motors Shipments Index declined for the second consecutive quarter during the first three months of 2009. Specifically, it fell more than 9% versus the fourth quarter of 2008 and 23.4% on a year-over-year basis. Fractional and integral horsepower motors both saw market demand weaken, but the decline in fractional units was noticably weaker compared to the first quarter of 2008.

National Electrical Manufacturers Association (NEMA) - Rosslyn, VA

Original Press Release

Demand for Motors Contracts Sharply During the First Quarter of 2009

Press release date: May 12, 2009

Demand for Motors Contracts Sharply During the First Quarter of 2009

( Rosslyn, Va.) May 12, 2008- NEMA's Motors Shipments Index declined for the second consecutive quarter during the first three months of 2009, falling more than 9 percent versus the fourth quarter of 2008 and 23.4 percent on a year-over-year basis. Since hitting its peak during the first half of 2006, the index has dropped more than 27 percent, with most of those declines occurring during the last two quarters. Fractional and integral horsepower motors both saw market demand weaken, but the decline in fractional units was appreciably weaker compared to the first quarter of 2008.

Entering its second calendar year in recession, the U.S. economy has shown minimal signs of improvement. Indeed, while the worst of the financial crisis may have abated early 2009, the real economy has shown severe deterioration, characterized by weak consumer spending, a free fall in business investment and contraction industrial output. Real GDP declined 6.1 percent during the first quarter of 2009, following a 6.3 percent drop in the final three month period of 2008, marking the worst stretch for the U.S. economy in more than 35 years.

Global trade flows, which had provided some offset to flagging domestic demand as recently as last summer, point to a huge retrenchment in demand for industrial equipment overseas. Although net trade technically 'added' to topline growth in real GDP, annualized declines in exports exceeding 30 percent during the first quarter of 2009 do not bode well equipment manufacturers over the near term. With companies in the midst of slashing capital spending outlays due to tight credit conditions and declining profits, as well as manufacturers cutting factory utilization rates to their lowest levels on record, the near-term outlook is quite unfavorable for domestic industrial equipment and machinery demand. Thus, NEMA/BIS expects the Motors Shipments Index will likely see further downward pressure for the next several quarters.

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 and Mexico City.

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