Electrical Industry ‘Confidence’ Reading — The Eleblog Questions Its Value (does it predict anything???)

NEMA’s Electroindustry Confidence Index, released monthly, has been down below the “50″ level for 3 months in a row now – for the “current” index. The “6-months-from-now” index reads better.

Here’s the lead on the NEMA emission:

NEMA’s Electroindustry Business Confidence Index (EBCI) for current North American business conditions again moved upward, climbing to 45.5 in October from 42.1 in September and 35.7 in August. Its recent rebound has left the index just short of the 50 point breakeven level last surpassed in June.

. . . actually, it pains the EleBlog to point out that 45.5 is not “just short” of 50. It’s 4.5 points — or roughly a 10% move! — short of 50.

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Also of note: the “future” (6-months-ahead) number:

The EBCI for future North American conditions edged upward to its highest level in five months in October at 65.9. The index had registered 63.2 in September.

So the EBCI is telling us that things will be better in 6 months (65.9 Oct., 63.2 Sept.) vs. current (45.5 Oct, 42.1 Sept.).

Maybe.

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But wait: EleBlog went back. Octoer is roughly 6 months from Feb-Mar-Apr (well, it’s 6 months from April, but let’s give the EBCI a little leeway).

What did the “future” EBCI read in those months, we wondered?

February — 75

March — 86 (“highest reading of the year”)

April — 81.8 (“remained at the high end of its historic range”)

NET: The Feb-Mar-April “6-months-ahead’ readings were OUTSTANDING. BUT the “current” readings of the past three months (Aug-Sept-0Oct) SUCK.

Does this mean the index NEMA compiles and reports on is NOT useful? It might be time to figure that out . . . it’s very possible that you won’t see this reported on monthly here on EleBlog in the future.

Source: http://electricalcontractor.com/?p=6744

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