Demand for Industrial Control Equipment Weakened in Second Quarter

NEMA's Primary Industrial Controls Index decreased three percent on a quarter-to-quarter basis during the second quarter of 2012. The index stands 3.3 percent above its year-ago level and 48 percent above the cyclical trough observed in mid-2009. Nonetheless, inflation- and seasonally-adjusted shipments still remain slightly below their previous cyclical peak. The Primary Industrial Controls and Adjustable Speed Drives Index, a broader measure of industrial controls demand, also posted a slight decline during the second quarter of 2012, falling 1.3 percent following its 10.2 percent gain in the first quarter. On a year-over-year basis the index climbed at a 4.6 percent rate. Although the manufacturing sector experienced a surge of activity in the first quarter of 2012, the second quarter showed a weak annualized gain of only 1.4 percent. The forward-looking ISM manufacturing indices for new orders and export orders remain sluggish looking forward. While the weak 2012Q2 growth performance probably represented a low water mark, annualized increases in output are seen running no higher than the mid-2 percent range for the rest of 2012 and the whole of 2013.