The current conditions index slid by more than 20 points from the near-term high of 76.5 reached in March of this year. As recently as last month, the current conditions index topped 60 but fell 7.2 points to reach July’s value of 53.3. Most of the change came from a larger share of respondents – 67 percent in July versus 58 percent last month – who reported unchanged conditions. The share of those who noted that conditions are worse increased by only two points to 13 percent this month. Some respondents mentioned sluggishness in key markets, while others noted improving economic conditions overall and the seasonal boost typical of summertime.
The reported intensity of change in electroindustry business conditions continued to erode in July. The median value of this measure remained at zero for the second consecutive month. The mean value, which is a more volatile measure, declined from 0.3 in June to 0.1 this month. Panelists are asked to report intensity of change on a scale ranging from –5 (deteriorated significantly) through 0 (unchanged) to +5 (improved significantly).
The future conditions index fell even more dramatically than the current index. In January 2017, the six-month ahead index stood at 91.7 but dropped 35 percentage points since that zenith. July’s reading clocked in at 56.7 points, down from 68.4 last month. Unlike the current index composition changes, most of the decline in the future index could be attributed to the 27 percent share of July’s panelists who expected worse conditions in six months, which was an 11 point increase from June. The share of those expecting unchanged conditions edged up only slightly from 32 percent in June to 33 percent this month.