EleBlog

28 Apr, 2009

The drift of most economic commentary of late has been "things are getting better, or at least getting worse at a slower pace -- there are 'green shoots' and we're at or very near the bottom."

The EleBlog is NOT SO SURE.

1. The Truck Tonnage index for March was DOWN BIG. From the release:

The gains during the previous two months, which totaled 4.5 percent, were erased with March’s drop. (February’s increase was revised down to 1.5 percent.) In March, the SA tonnage index equaled just 101.4 (2000 = 100), which is its lowest level since March 2002.  The fleets did report higher volumes than in February, as the not seasonally adjusted (NSA) index increased 10.2 percent, but that is well below the 15 to 20 percent range that NSA tonnage usually rises from February to March.  In March, the NSA index equaled 104.7.

Compared with March 2008, tonnage contracted 12.2 percent, which was the second-worst year-over-year decrease of the current cycle.  In December 2008, the largest year-over-year contraction, tonnage dropped 12.5 percent from a year earlier.

2. But things don't only move via truck, do they? Have about the Rail Freight Index? Big-time fall in the week of 4/18, says AAR -- including this:

Freight traffic on U.S. railroads was off sharply during the week ended April 18 in comparison with a year ago, the Association of American Railroads reported today. U.S. railroads originated 255,269 cars during the week, down 24.3 percent from the comparison week in 2008, although up 2.8 percent from the previous week this year. In comparison with last year, loadings were down 20.6 percent in the West and 28.6 percent in the East. All 19 carload commodity groups were down from last year, with declines ranging from 9.3 percent for grain mill products to 63.6 percent for metallic ores.

and

For the first 15 weeks of 2009, U.S. railroads reported cumulative volume of 4,025,476 carloads, down 17.7 percent from 2008; 2,789,760 trailers or containers, down 16.1 percent; and total volume of an estimated 427.3 billion ton-miles, down 16.6 percent.

3. How about the Baltic Freight Index? It's doing a lot better, but not HERE! 

April 20 (Bloomberg) -- The Baltic Dry Index, a measure of world trade, rose to the highest in almost a month on demand to transport iron ore to China and South American grains.

The index of commodity-shipping costs advanced 55 points, or 3.3 percent, to 1,737 points, according to the Baltic Exchange today. That’s the highest since March 25. Rents for panamax ships that haul grains jumped 3.7 percent to $12,955 a day, building on last week’s 36 percent gain. Bigger capesizes that transport iron ore climbed 4.4 percent to $20,772.

NOTE: That's good news. But check out the recent readings vs. those from earlier in the 2000s in this chart.

4. Check out "Equities still a bubble and equity guys still out of this world, BNP Paribas says," a blog post on FT Alphaville. Summary: We're still in a BIG bubble. Here's a snippet from the Paribas report, as offered on Alphaville:

Using current valuations, if one were to calculate the P/E multiple on 2009 earnings, one lands up with 14x using operating earnings and 30x using as reported earnings. We will leave investors to make their own judgement but P/E multiples of 30x certainly scream bubble to us.

 (More)

28 Apr, 2009

Distributors, who sell to contractors and their customers, can give a reasonable reading on how the industry is doing these days. Herewith, "the story" from three different angles:

Today, ANIXTER came out with its Q1 resuilts. Sales down 14%. The company sells a lot of datacom stuff, wire & cable, and fasteners. But te Q1 decline was really only 7%, according to the boss (Robert Eck, president/CEO):


Last week, WESCO offered its Q1 results. Sales were down 19.5% vs. one year ago, but the company noted that, on a comparable basis, the decline was 15.7%.


Grainger's sales were down 12% vs. Q1 2008, which the company adjusted to "down 10% on a daily basis." Grainger apparently will act like a greedy capitalist (that is NOT criticism), with these words from Jim Ryan, the boss:


Now, these three companies are NOT necessarily competitors. WESCO is a huge national supplier of electrical products; Anixter and WESCO's CSC unit compete on datacom; Grainger gets some walk-in service contractors business that, no doubt, WESCO would like.

- - - - -

EleBlog take: The results above provide us with the following picture:

• Anixter's diversified business was down 7% in Q1.
• Grainger's differently diversified business was down 10% in Q1.
• WESCO's more-concentrated business was down 15.7% in Q1

WESCO claims that the feedback it's getting is that an almost-16% decline over a three-month period is GOOD for the electrical distribution biz right now. I believe John Engel (for various reasons) -- let's say he's not ignorant of Regulation FD and isn't going to lie or mislead in a recorded webcast! If the suppliers he's quoting are telling WESCO the truth, then perhaps the balance of the electrical distribution business is down more like 20% (or more) in Q1.

Want more? Symbols are AXE for Anixter, GWW for Grainger, and WCC for WESCO. Go to Yahoo! Finance to grab the earnings press releases, Seeking Alpha to take a look at the transcripts of each company's confernce call. Anixter's earnings call is being held now (4/28, morning), so it might not be posted for a while.

- - - -

Final note: We'll get more input on how Q1 went in the electrical industry in the near future via the following sources:

a. GRAYBAR, which is NOT a public company, will post its 10-Q for Q1 at some point. The company has to do this because it has so many shares out (in the hands of retirees and current employees).

b. REXEL SA, which is based in France, has a huge U.S. subsidiary. The company normally posts a comprehensive press release on quarterly earnings, which offers some glimmers about what's going on in the U.S. (or at least "North America").

28 Apr, 2009

That's the word from Tom Gale, a friend of mine, reporting (on his blog) on the doings at the Industrial Supply Association's recent conference. ISA's members are distributors. A slice:

28 Apr, 2009

You missed (probably) the 4/14 webinar from E.C. magazine + TED on electrical products counterfeiting. But you can still see it and hear it, FREE.

Note: I work for TED magazine. I wasn't involved in the webinar, tho.

28 Apr, 2009

It's not a sea change, I don't think, but the March reading of the Architectural Billings Index (from the AIA) looks more optimistic than it has since 2/08.

Note that it might be a one-month (or reflect the beginning of a several-month) "dead cat bounce." That's the suspicion here at The EleBlog.

Included in AIA's ABI write-up was this note of interest:

Reflecting the persistent weakness the profession is currently experiencing, our survey panelists reported this month that guaranteed compensation is anticipated to decline across the board in 2009. Senior staff will be the hardest hit, with principal/partner salaries predicted to decline by more than 6 percent. Compensation for licensed architects will fall by 4 percent, and salaries for more junior positions (nonregistered graduates, interns) will be down by more than 3 percent.

For firms where salaries have declined or will decline this year, more than a third (35 percent) indicated that the primary cause would be a reduction in compensation, without reducing hours worked. One quarter attributed the decline to reduced hours worked, while an additional 26 percent will reduce both salary and hours worked. The remaining 14 percent cited other reasons for the decline.

Am I trying to make you feel sorry for the construction designer community? Absolutely not. But this is the kind of thing that slowly (but surely) leads to a contraction in the economy. When salaries are cut "across the board," people in respected professions (i.e., architects) --

(a) have less disposable income;

(b) FEEL as if they have a LOT less; and

(c) spend much less.

. . . so perhaps those "licensed architects" will take a 4% average hit to their average compensation and spend an average of 10% less in 2009-2010.

28 Apr, 2009

McGraw-Hill Construction's March report on the $ value of new construction starts is out, and it's mysterious. According to the unadjusted data at the bottom of the web page, non-residential construction is down 47%, Jan-March 2009 compared with Q1 of 2008.

YEAR-TO-DATE CONSTRUCTION STARTS
Unadjusted Totals, In Millions of Dollars

	3 Mo. 2009	3 Mo. 2008	% Change
Nonresidential Building	$34,143	$64,454	-47
Residential Building	20,717	43,319	-52
Nonbuilding Construction	28,302	31,791	-11
Total Construction	$83,162	$139,564	-40

That's a HOLY CRAP number. The 40% down is a HOLY CRAP number. The 11% down in Nonbuilding Coinstruction is a HOLY CRAP number.

Obviously, this amount of blessed municipal solid waste sent me in search of WTF is happening. Here's an explanatory paragraph from the text (read the whole thing by clicking the link above):


I'm not sure that helps. It tells us that five big projects started up in Q1 2008. But let's throw those projects OUT and look at the numbers without them:


. . . how good is that?

AND THE KICKER: These figures (the ones posted above in the table) are actually significant improvements over MHC's February data.

FINAL NOTE: Reed Construction Data, which is trying to do the same thing as MHC, said Q1's construction starts were down 17.7% overall, and 8% in nonres.

25 Apr, 2009

The U.S. DoE has a division, Energy Efficiency & Renewable Energy. EERE puts out a weekly newsletter which IS worth your time.

Here are the contents of the 4/22 edition --


That's a wowser of an issue! I know, because I read this thing religiously. To subscribe (e-mail sub, FREE) go here. To access the achieves (back issues posted back to 1999!!!) -- here.

25 Apr, 2009

DISCLAIMER: As before, I work as a freelancer for the NECA-IBEW marketing cooperative, which owns/operates ElectricTV -- so this is NOT entirely disinterested.

As visitors to this site might now, I have been a proponent of "smarter, greener buildings" -- even giving presentations with that title (co-presenter with Marty Riesberg of the NECA-IBEW national training program) to three NAED regional meetings in 2007-2008.

Here's a relase on a specific segment of the recent edition of ElectricTV. I think it's worthwhile -- and it features electrical folks TALKING building automation, with a good deal of expertise!