Press Release Summary:
According to NEMA, Lighting Systems Index increased 0.7% from previous quarter, but even with improvement, inflation-adjusted shipments of lighting equipment continued to track below its year-ago pace by 2.3%. Among index's component categories, emergency lighting equipment and luminaires posted gains on year-over-year basis, while ballasts, miniature lamps, and large lamps saw shipments decline versus second quarter of 2006. Housing market continues to weigh on demand for lighting equipment.
Original Press Release:
Lighting Index Posts Modest Gain During Second Quarter of 2007
ROSSLYN, Va. August 8, 2007-NEMA's Lighting Systems Index edged higher during the second quarter of 2007, increasing 0.7 percent from the previous quarter. Even with the improvement over the first quarter, inflation-adjusted shipments of lighting equipment continued to track below its year-ago pace by 2.3 percent. Among the index's component categories, emergency lighting equipment and luminaire posted gains on a year-over-year basis, while ballast, miniature lamps and large lamps saw shipments decline versus the second quarter of 2006.
The housing market continues to weigh on demand for lighting equipment. Single-family housing starts have contracted by at least 20 percent on a year-over-year basis in each of the last four quarters and the overall level of starts is at its lowest point since late 1997. In addition, with the pace of building permit issuances still declining, inventories of newly-built and existing homes rising, and lending standards tightening in the wake of the sub-prime mortgage market's veritable meltdown, prospects for increased residential construction activity are very dim, at least through the near term.
Given that the future conditions component of the NAHB housing market index retreated for the fifth consecutive month, and has declined nearly 20 points over that time period, a wide majority of homebuilders expect that conditions will worsen over the near term. The only questions now with respect to the housing market's downturn are when will the bottom be reached and how much further will it be in decline?
On the upside, the nonresidential construction sector has helped to offset the recession in the housing market to some degree. Indeed, real investment in commercial, industrial, and other nonresidential structures has increased by an average annualized pace of 12 percent during the past six quarters. Although spending on offices, hotels, and manufacturing plants will likely begin to decelerate over the next year or so, underlying sources of support, such as record profits and falling vacancy rates, should keep the level of demand for new space expanding through at least 2009.
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.
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