Press Release Summary:
Demand for motors grew for fourth straight quarter during April to June 2011 period as NEMA's Motors Shipments Index increased 16.4% from previous quarter. Since bottoming out in second quarter of 2009, index has climbed a cumulative 55% - and now exceeds its pre-recession high. Notwithstanding recent strong gains, most incoming data indicates that manufacturing growth is cooling amidst persistent weakness in U.S. economy and slowing of global economy in general.
Original Press Release:
Motors Shipments on the Upswing in First Half of 2011
ROSSLYN, Va., - Demand for motors grew for a fourth straight quarter during the April to June 2011 period as NEMA's Motors Shipments Index increased 16.4 percent from the previous quarter. This sizable gain followed on the heels of a 13.1 percent gain posted in the first quarter of the year. Since bottoming out in the second quarter of 2009, during the depths of the Great Recession, the index has climbed a cumulative 55 percent-and now exceeds its pre-recession high. Growth in the fractional horsepower segment of the motors market continued to far outpace that of the integral horsepower segment in the first half of 2011, as has been the case over the last two years. The inflation adjusted dollar value of fractional horsepower motors shipments more than doubled between the second quarter of 2009 and the second quarter of 2011 while the value of integral horsepower motors shipments increased by only 10 percent over the same period.
Notwithstanding the recent strong gains, the near-term economic environment appears far less favorable. The U.S. manufacturing sector started the third quarter of 2011 on a weak note. The Institute of Supply Management's purchasing managers index for the manufacturing sector slipped to 50.9 from 55.3. While the ISM maintains that any value for the PMI above 50 indicates that the manufacturing sector is growing, the July index is down substantially from the robust level of 61.2 reached in March 2011. Moreover, the new orders index slipped to 49.6 indicating contraction for the first time since June 2009 when it was 48.9.
Recent data on durable goods orders further underscores the fragility of the heretofore robust manufacturing recovery. Orders of durable goods fell 2.1 percent in the June, the final month of the second quarter, erasing the 1.9 percent gain reported in May. Excluding the volatile transportation sector, orders were up slightly by 0.1 percent. Meanwhile electrical equipment orders including appliances and components were 0.4 percent higher following a 3.1 percent gain in May.
Overall, most of the incoming data indicates that manufacturing growth, one of the few bright spots in the recovery to date, is cooling amidst persistent weakness in the U.S. economy and slowing of the global economy in general. This news leaves much of the electrical manufacturing industry with reduced prospects for significant lift in the second half of 2011.
NEMA is the association of electrical and medical imaging equipment manufacturers. 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, industrial, commercial, institutional, and residential applications. The association's Medical Imaging & Technology Alliance (MITA) Division represents manufacturers of cutting-edge medical diagnostic imaging equipment including MRI, CT, x-ray, and ultrasound products. Worldwide sales of NEMA-scope products exceed $120 billion. In addition to its headquarters in Rosslyn, Virginia, NEMA also has offices in Beijing and Mexico City.
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