Year in Review

“National Factbook” from Electrical Wholesaling by Jim Lucy, Chief Editor

2010 will be a year of improvement, but it’s a going to be a long climb back to economic respectability.

Electrical Wholesaling has collected economic data for the segments of the construction and industrial markets that will have the most impact on our business in 2010. These data should prove more valuable than the general economic forecasts you find in the business pages of most newspapers, because those sources focus more on retail sales, consumer spending and macroeconomic information rather than on data that directly affect our market.

PURCHASING MANAGER’S INDEX

Source: Institute for Supply Management

The Purchasing Managers Index (PMI) is one of the most widely watched indicators of the health of the industrial market. That’s why when this monthly survey of purchasing managers dropped in October to 38.9 points and — its lowest reading since 1982 — and then lingered around the 40-point mark through March it made economists very uneasy. But this number hit growth territory in August when it topped the all-important 50-point measure that indicates the manufacturing arena is expanding. Below 50 points indicates the industrial market is generally contracting.

HOUSING INVENTORY

Source: U.S. Census Bureau and the National Association of Realtors

As a measure of the number of vacant new homes and existing houses for-sale-by-owner on the market, this statistic is just as important as building permits and housing starts. Housing inventory is one of the brightest spots in this market, because home sales are increasing and soaking up excess inventory. Through September, inventory had decreased 700,000 units, from 4.3 million in Sept. 2008 to 3.7 million units this year. At this rate, the for-sale housing stock would take 7.8 months to clear out, down from 9.9 months a year earlier.

TOTAL CONSTRUCTION

Source: McGraw-Hill’s 2010 Construction Outlook

While expecting total construction spending to increase 11 percent in 2010 to $466.2 billion, McGraw-Hill’s forecast says that’s 32 percent below the market’s peak in 2006 of $689.6 billion. Much of that decline came in 2009, which is expected to come in 25 percent lower than 2008. It expects the commercial building, manufacturing and utility segments to remain in negative territory for 2010, but is forecasting increases for single-family and multi-family housing, institutional buildings and public works.

HOUSING STARTS

Source: National Association of Home Builders (NAHB)

The housing market may have finally found a bottom, but that bottom is way below anything seen in years. Forecasts for 2009 and 2010 are less than half the activity this market saw during its go-go years from 2003-2006, when starts were never less than 1.8 million and topped 2 million in 2005. NAHB expects 568,000 total housing starts in 2009, 716,000 starts in 2010 and 1.059 million housing starts in 2011. If you need some good news, look toward the decrease in housing inventory and the expansion of the tax credit for homebuyers.

MACHINE TOOL ORDERS

Source: American Machine tool Distributors Association (AMTDA)

Machine-tool orders offer a quick read on the health of the industrial market because they reflect the sales of the equipment on the factory floor that manufacturers use to shape, mold and form metal for use in their products. September’s numbers were up 17.8 percent from August but down 69.3 percent from the total of $500.57 million reported for September 2008. With a year-to-date total of $1,199.93 million, 2009 is down 67.8 percent compared with 2008.

Get the free newsletter

Sign up for news, trends and equipment for sale in the lifting and rigging industry.
By signing up you agree to our Terms of Use and Privacy Policy. You may unsubscribe at any time.

Latest Products For Sale

Type Description
Equipment National Brand - Used 5x7 and 6x12 Dies - All dies meet specifications - Various…
Equipment 100 Feet of Steel Framing • Last four sections of pre-owned 1.3 mil test bed…
Equipment 300K – 62 ft. PTM SATEC • Hydraulic guards • 62’ overall length • 6’…
Equipment 100K x 40 ft. Single Range, 7.5HP Manual Control Texmate Readout, 2’ Stroke – Tube…
Equipment Refurbished 500K Lucker Wire Rope Grip • Manual Operated • Front Face Mount • 500,000…

News & Articles