Current and Future Components Move in Opposite Directions as Policy Uncertainty Ramps Up

Current and Future Components Move in Opposite Directions as Policy Uncertainty Ramps Up

This piece was originally published in the August 2018 issue of electroindustry.

Steve Wilcox, Director, Market Research, NEMA

A nine-point jump brought June’s Electroindustry Business Confidence Index (EBCI) current conditions component to its highest reading since January. Although a larger share of respondents noted worse conditions, those reporting better conditions constituted a majority in June, helping to bring the overall score to 69.2. The solid topline number was tempered by respondent comments that pointed to an undercurrent of uncertainty along with sector-specific struggles brought about by trade actions and the tax bill.

The reported intensity of change in electroindustry business conditions increased compared to the previous month’s measure. The mean value edged up from 0.5 in May to 0.6, and the median value moved from 0 to 1 in June. Panelists are asked to report intensity of change on a scale ranging from −5 (deteriorated significantly) through 0 (unchanged) to +5 (improved significantly).

While the current conditions measure expanded by just over nine points, the future conditions component contracted by an opposite and nearly equal amount, dropping from 66.7 in May to 57.7 in June. The proportion of panel members that reported expecting worse conditions doubled while the share of those expecting better conditions in six months edged lower. Member comments ranged from optimism about pent-up demand to concern about a potential recession driven by trade policy and the results of an overheating economy.

Visit www.nema.org/ebci for the complete June 2018 report.


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