Press Release Summary:
NEMA's Motors Shipments Index (MSI) increased 6.1% during fourth quarter of 2009, marking its second consecutive gain. Demand for motors, however, remains weak; MSI is still 5.7% below posted level from 2008 Q4. Inflation- and seasonally-adjusted shipments of fractional horsepower motors rose for third consecutive quarter, and integral horsepower motors saw their second increase in past 7 quarters. Surging exports and recent turn in inventory cycle primarily support rebound.
Original Press Release:
Solid Gain in Motors Shipments to Close Out 2009
ROSSLYN, Va. - NEMA's Motors Shipments Index (MSI) increased 6.1 percent during the fourth quarter of 2009, marking the second consecutive gain for the index. Nonetheless, demand for motors remains weak compared to its performance of recent years, as the MSI is still 5.7 percent below the level posted in 2008Q4. Inflation- and seasonally-adjusted shipments of fractional horsepower motors rose for the third consecutive quarter, while integral horsepower motors saw only their second increase in the past seven quarters.
The U.S. economy appeared to gain some momentum during the fourth quarter of 2009, expanding at a 5.9 percent annualized rate to finish the year. However, the underlying components driving growth do not portray a broad-based recovery. Inventories accounted for a sizable chunk of calculated growth in real GDP during 2009Q4 and the current turn in the inventory cycle is not expected to last beyond the next couple of quarters. One surprising result from the Q4 GDP release was a stronger-than-expected gain in business investment spending on equipment and software, suggesting that companies are beginning to show some confidence in near-term economic prospects.
At this time, the recent turn in the inventory cycle along with surging exports are supporting most of the rebound in manufacturing activity. However, this is more of a temporary boost and the sector's prospects for recovery will hinge on increased export demand continuing as well as capital spending exhibiting signs of sustained growth. The recent upturn in output will generate replacement demand for motors and other equipment used to drive production processes in manufacturing plants. With the national average capacity utilization rate remaining well below long-term historical norms, this boost will be somewhat limited until a larger share of productive manufacturing capacity comes back on line. Consequently, NEMA's Motors Shipments Index will likely see modest gains on balance during 2010.
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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