Lighting Systems Index first quarter free falls to new low
By National Lighting Bureau
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On a year-over-year basis, the Index plummeted by 22%. No covered equipment category was spared; all declined significantly, with ballasts and fixtures showing the most weakness compared to the first quarter of 2008.
NLB Communications Director John P. Bachner commented that “residential-market weakness had for more than two years been offset by the strength of the nonresidential market. That market, too, is in decline. Investment in lodging, office, retail, industrial and other ‘income properties’ fell 23% on an annualized basis during the January-March 2009 period. While we all know that recovery lies ahead, lighting equipment sales will remain under pressure until people feel confident enough to remodel, expand, and build new.”
Established in 1998, the NEMA Lighting Systems Index is a composite measure of lamps, luminaires, ballasts, emergency lighting, exit signs, and other lighting products shipped nationally and internationally from the United States by the 450 companies that comprise the National Electrical Manufacturers Association (NEMA), one of the National Lighting BureauÂ’s founding sponsors.
The Index uses 2002 data for its 100-point benchmark; first-quarter 2009 performance receded to the 75-point level.
According to NEMA Economic Analysis Director Brian Lego, residential investment has contracted for 13 consecutive quarters; 38% (on an annualized basis) during the first quarter of 2009 alone.
He said, “Although recent evidence suggests a bottom could be forming in new home sales, the deteriorating labor market and further expected declines in house prices point to lackluster demand for new residential construction activity going forward. Demand for residential lighting equipment has also been hurt by weak consumer spending, as households have increased savings and cut back on expenditures as a result of lower housing and stock portfolio values, not to mention the uncertainty created by high and rising levels of unemployment.”
NEMA members manufacture a wide range of products used in the generation, transmission, distribution, and control of electricity, as well as innumerable end-use products in addition to those used in lighting. The value of NEMA membersÂ’ annual shipments totals $100 billion.
With regard to the nonresidential market, Mr. Lego commented, “With companies registering declines in profitability and struggling to acquire debt financing on capital markets, firms have delayed or canceled construction projects. In addition, given that layoffs remain at a high level as companies seek to rein in labor costs and production activity is idled due to a glut of inventories, lighting demand created by expanding or building facilities has eroded and will likely remain weak for several more quarters.”
