First quarter 2010 performance of the NEMA Lighting Systems Index (LSI) was 1.1% ahead of results for the fourth quarter of 2009, the National Lighting Bureau (NLB) reports, marking the third consecutive quarter of growth.
“The growth has been modest, but that’s to be expected,” says NLB’s Executive Director John Bachner. “What we cannot help but be excited about is the trend.”
Bachner notes that first-quarter 2010 LSI performance was 1.2% better than first-quarter 2009’s, marking the first time since the second quarter of 2006 that the Index registered an appreciable year-over-year gain.
Miniature lamp and fluorescent ballast shipments were particularly strong, Bachner observes, adding that the gains involved more than offset slight dips in shipments of large lamps, emergency lighting equipment, and fixtures.
Brian Lego, NEMA’s director of economic analysis, says that Lighting Systems Index gains reflect improvement of the U.S. economy as a whole: “Real GDP increased 3.2% on an annualized basis during the first quarter of 2010 and has expanded at an average annualized rate of nearly 4% over the last three quarters. As was the case in the fourth quarter of 2009, inventory investment contributed greatly to growth; however, capital spending has increased at a double-digit pace in the past two quarters, and consumer spending posted its largest percentage gain in three years. Moreover, other data sources, such as the ISM manufacturing and non-manufacturing surveys, durable goods orders, and payrolls, paint a picture of an economy beginning to gain some traction.” Nonetheless, Lego said, a double-dip recession cannot be ruled out entirely, although the probability of that event “is shrinking rapidly.”
“We’re not out of the woods yet,” Bachner remarks, pointing out that shipments, while improving, remain weak compared to what they were in years past. “The Index hit 77 during the first quarter of 2010. It hit 105 four years earlier.” Lego echoes Bachner’s sentiments, saying that the LSI is expected to see only modest gains “at best” for the balance of 2010, because key lighting-equipment demand drivers “have yet to see their prospects improve.”
Lego goes on to note, “The residential market has been volatile for the past year, and the recent expiration of the federal homebuyer tax credit could cause housing demand to remain flat or weaken through the end of the year absent a stronger turnaround in the labor market. Private nonresidential lighting equipment demand is expected to weaken further over the course of the year as companies continue to pull back on new construction in the face of tight lending conditions and still-rising vacancy rates. While retrofitting activity could bolster demand for commercial lighting equipment to some extent, outdoor equipment and other systems used in public sector projects are likely to see the largest boost in shipments over the near term, thanks to the ongoing process of spending out stimulus funds on construction projects.”
Source: The National Lighting Bureau
