Direct & current

Electrical Apparatus, Jun 2008

JUNE 2008

DEMAND FOR MOTORS ROSE IN THE FIRST QUARTER. The Motors Shipments Index, compiled by the National Electrical Manufacturers Association, increased 5.2% during the first quarter of 2008, nearly reversing a 7.2% slide in the final three months of 2007. The index is still 4.3% off its year-ago level and has been on a downward trend since early 2006. The fractional-horsepower segment continues to drive the index's weakness. Integral-horsepower motors, on the other hand, have registered nearly uninterrupted year-over-year growth in inflation-adjusted shipments for the past four years. Broader measures of manufacturing activity, such as industrial production, "show the sector weakening further," the report states, "but a substantial proportion of this sluggishness can be traced back to autos and housing-related segments. . . ."

. . . WHILE DEMAND FOR CONTROLS TOOK A HIT. NEMA's Primary Industrial Controls Index, meanwhile, reversed nearly all of its prior period's gains during the first quarter of 2008 as the index contracted 5.9% after a downwardly revised 6.8% increase in the fourth quarter of 2007. On a year-over-year basis, the index gained 3.7%, its eighteenth in a row, suggesting that demand remains at a high level. A broader measure of demand for industrial controls, the Primary Industrial Controls and AdjustableSpeed Drives index, followed the same general trend, dropping 5.5% from the previous quarter but increasing 3.7 compared to the first quarter of 2007. "Any deterioration in demand for industrial controls should not come as a surprise," say the report's authors, "particularly given the lackluster readings on the U.S. economy over the past two quarters."

DISTRIBUTORS' PERFORMANCE FORECAST MET EXPECTATIONS. The Power Transmission Distributors Association says that a report predicting moderate growth in sales with little change in gross margins in 2007 was on target. When asked in October 2006 to forecast sales for 2007, 78% of distribution firms anticipated growth in sales, with 39% of distributor respondents indicating that they expected sales to increase between 5% and 9.9%. Actual sales growth for a typical PTDA distributor in 2007 fell at the low end of that range at 5.4%. Exactly half of the respondents expected gross margins to remain constant in 2006, and those margins ended up increasing slightly, by 0.6%

MISSOURI MAY GET TOUGHER ON COPPER THEFT. Gov. Matt Blunt of Missouri had a blunt message in May for copper thieves: If he gets his way with the state legislature, copper and other metals will become tougher to sell to scrap dealers. "Missouri, as well as the rest of our country, is in the midst of a copper theft spree," the Jefferson County Journal quoted the governor as saying. The proposed legislation would require more thorough record-keeping for purchasers of copper, brass, bronze, and some aluminum metals. As reported in past issues of EA, the soaring price of copper has resulted in a wave of thefts from utilities and other electrical installations. Some scrap dealers are objecting, saying that the new requirements would be too burdensome.

THE EDITORS