The current conditions index rebounded 12.3 points in August to 65.6, erasing the decline in July. The August reading is still 10.9 points below the recent high of 76.5 reached in March. The recent reading resulted from a larger proportion of respondents, 44 percent in August versus 20 percent in July, that reported better conditions. The share of panel members that noted worsening conditions remained flat at 13 percent. Meanwhile 44 percent responded that conditions were unchanged in August compared to 67 percent in July. Some of those surveyed cited strong demand and solid fundamentals, while others reported declines in industrial business lines.
The reported change in the electroindustry business conditions continued to signal a lack of conviction among survey respondents. The median value remained at 0 for the third consecutive month. The mean value remained unchanged in August at 0.1. 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 rebounded in August by 5.8 points to reach 62.5. Much of this improvement is attributable to a decline in the number of respondents expecting worse conditions. In addition, the number of panelists anticipating better conditions six months from now increased from 40 to 44 percent. Despite the August rebound, the index measuring business conditions six-months ahead was still 29.2 points lower than the peak of 91.7 in January. Survey respondents noted tightening labor market conditions and increasing wages as causes for concern.