Motors Shipments Improved in Fourth Quarter of 2012
Demand for motors increased in the fourth quarter 2012 as NEMA’s Motors Shipments Index grew 6.5% from the previous quarter. This improvement follows on the heels of a 17.3% decline posted in the third quarter. Since bottoming out in the second quarter of 2009, during the depths of the Great Recession, the index has climbed a cumulative 30.9%, but has dropped below its pre-recession high for the last two 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 and continued to fall in the fourth quarter of 2012 while integral horsepower motor shipments recorded a more moderate decline for the second consecutive month. The inflation adjusted dollar value of fractional horsepower motors shipments has increased by over a third between the second quarter of 2009 and the fourth quarter of 2012, while the value of integral horsepower motors shipments increased almost 2% over the same period.
The softening in the index has coincided with a slowdown in manufacturing activity. Although the sector experienced a surge in the first quarter of 2012, the rest of the year did not fare as well as factory production failed to top 2% in the last three quarters of 2012. Still, the forward-looking ISM manufacturing index for new orders hovered above the break-even mark of 50 on average in the fourth quarter and suggests stronger improvement in the first half of 2013. Production growth is forecasted at 1.4% year-over-year for 2013, before picking up to over 3% in 2014 amidst stronger demand domestically and globally.
