NEMA Reports Drop in Motor Shipments
December 13, 2012—Demand for motors declined for first time this year during the third quarter of 2012 as NEMA’s Motors Shipments Index fell 19.1 percent from the previous quarter. This backslide follows on the heels of a 5.4 percent gain posted in the second quarter and a 5.9 percent gain recorded in the first quarter of this year. Since bottoming out in the second quarter of 2009, during the depths of the Great Recession, the index has climbed a cumulative 34 percent but has now dropped below its pre-recession high after topping it in the five previous quarters. Growth in the fractional horsepower segment of the motors market rebounded strongly in the first half of 2012 but plummeted in the third quarter of 2012 while integral horsepower motor shipments experienced its first decline since the fourth quarter of 2010. The inflation adjusted dollar value of fractional horsepower motors shipments has increased by almost half between the second quarter of 2009 and the third quarter of 2012, while the value of integral horsepower motors shipments increased by almost a third over the same period.
Electrical equipment shipments growth has weakened as 2012 has progressed; core electrical equipment, including motors, fell nearly 9 percent in the third quarter after an average pace of increase of 8 percent in the first half of the year. Although the manufacturing sector experienced a surge of activity in the first quarter of 2012, the rest of the year has not fared as well as manufacturing output fell nearly one percent in the third quarter and has continued to slide into the fourth quarter. Recent data on durable goods orders also point toward a slowing of the manufacturing recovery. Still, the forward-looking ISM manufacturing index for new orders suggests activity is on track to at least hold steady in the fourth quarter as it continued to hover above the “break even” mark of 50 in November. The manufacturing sector output growth is forecasted at 4.2 percent for the whole of 2012 and just below 2 percent for 2013 before picking up to over 3 percent in 2014. Meanwhile, the electrical manufacturing industry is expected to advance at a steady annual pace over the next two years.