Press Release Summary:
According to NEMA's Lighting Systems Index, demand for lighting equipment rebounded during first quarter of 2007, climbing 6.6% from level posted in prior quarter. However, overall shipments remain below levels seen throughout 2006, and are down more than 6% on year-over-year basis. Major underlying drag on lighting demand remains the US housing market, while commercial, industrial, and nonbuilding construction activity has managed to offset lagging residential construction sector.
Original Press Release:
Lighting Equipment Demand Improves but Still Lags Behind Early 2006 Pace
ROSSLYN, Va., May 22, 2007-NEMA's Lighting Systems Index rebounded during the first quarter of 2007, climbing 6.6 percent from the level posted in the prior quarter. However, overall shipments remain below the levels seen throughout most of 2006, and are down more than 6 percent on a year-over-year basis. The topline index was supported in the most recent quarter by increased shipments of lighting fixtures, ballasts, and emergency lighting equipment, while shipments of miniature and large lamps both declined compared to the first quarter of 2006.
The major underlying drag on lighting equipment demand remains the U.S. housing market. Indeed, single-family housing starts fell to a new cyclical low during the first quarter of 2007, also their lowest level in a decade, and recent building permits data suggest little to no improvement through at least the latter half of this year. At the same time, homebuilder confidence has receded from what had been a modest upward trend, with the NAHB housing market index retreating to its lowest April reading on record, and measures of expected activity in the residential market over the next six months indicate a majority of builders see conditions getting worse before things improve.
By contrast, commercial, industrial and nonbuilding construction activity has managed to offset the flagging residential construction sector to some extent. In addition, these market segments should bolster demand long enough for the housing market to at least stabilize. Growth in new nonresidential construction did decelerate during the first quarter of 2007, but the strong condition of underlying indicators of business investment and government infrastructure spending, ranging from near-record corporate profits to robust growth in tax revenues, point to additional gains going forward.
The NEMA Lighting Systems Index is a composite measure of NEMA-member companies' U.S. shipments of a variety of lighting products, including lamps, luminaire, ballasts, emergency lighting, and exit signs. Product shipments data are drawn from NEMA statistical surveys and are adjusted for inflation and seasonal fluctuations.
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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