Press Release Summary:
NEMA's Lighting Systems Index increased 1.5% between 1st and 2nd quarters of 2008. Although this marks second consecutive quarter that shipments expanded, index remains 3.5% off its level from 1 year ago and more than 8% from peak observed at beginning of 2006. Among index's 5 segments, domestic shipments rose for fixtures, ballasts, and miniature lamps on year-over-year basis, while emergency lighting systems and miniature lamps saw shipments contract compared to 2nd quarter of 2007.
Original Press Release:
Lighting Systems Index Posts Second Consecutive Quarterly Gain-Near-term Prospects Are Poor
ROSSLYN, Va., August 19, 2008- NEMA's Lighting Systems Index increased 1.5 percent between the first and second quarters of 2008. Although this marks the second quarter in a row that shipments of lighting equipment expanded, the index remains 3.5 percent off its level from a year ago and more than 8 percent from the peak observed at the beginning of 2006. Among the index's five segments, domestic shipments rose for fixtures, ballasts, and miniature lamps on a year-over-year basis, while emergency lighting systems and miniature lamps saw shipments contract compared to the second quarter of 2007.
The residential market remains a significant drag on demand for lighting equipment. Indeed, the U.S. housing market has shown virtually no sign of improvement over the past quarter, as construction activity continues to decline, prices plummet, and sales are held back by a weak labor market and tight credit. While the worst of times may soon be in the past, improvements going forward certainly will not be swift since inventories in many markets remain beset with a glut of new unsold or foreclosed homes.
To date, nonresidential construction activity has managed to buoy lighting demand even as the tumult continues for the flagging residential sector. According to preliminary data, inflation-adjusted business spending on commercial, industrial, and other income properties advanced nearly 11 percent on an annualized basis during the second quarter of 2008 and has averaged a 12 percent annualized rate of growth since early 2006. However, evidence suggests nonresidential construction activity will face some pressure going forward. For example, the American Institute of Architects (AIA) billings index recorded its fifth consecutive month in contractionary territory in July. Firms specializing in commercial and industrial projects reported the worst prospects for new projects. Weaker earnings reports, a seized-up CMBS market, and tighter lending conditions have all combined to dampen prospects for construction plans over the next 12 months, thereby weighing on demand for installations of new lighting equipment.
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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