It's been more than a year since the global economy began its free fall. Ignited by the housing and mortgage crisis in the United States, the recession came to a head during summer 2008. Although the pulse of the nation's economy appears to have stabilized during second quarter of 2009, the prolonged downturn has left consumers and investors scarred. Economists, wary of making recovery predictions too soon, are playing it safe lest the market suffer another significant decline. This suggests that the next six months to a year, and maybe even longer, will be characterized by regular fluctuations in the major economic indexes.
The lighting design community certainly has seen its share of financial disruptions over the past year. (Although lighting design hasn't been hit as hard as architecture, which has experienced mass reductions in its workforce and the canceling and delaying of many projects.) Still, architects and lighting designers alike are cautiously optimistic about the future, but remain reluctant to acknowledge that they think things might have reached the bottoming-out point. Since March 2009, lighting design firms have seen an increase in requests for proposals and, in general, are remaining busy. For some firms, workloads are disproportionately active given the overall economic climate, a result of no one wanting to turn work away. But all design firms are conveying that their greatest concern lies with their ability to collect project fees.
On the manufacturing front, there has been no decline in the release of new lighting products. Instead, there is a greater number of LED-related products than ever before. Lighting designers have grave concerns about insufficient specification data and reliable testing standards for all of these new LED products, and one wonders how many more new products the market can bear.
Manufacturers also are being bolstered by the immense interest in energy-efficient products and in retrofitting under performing spaces. As a result, lighting companies have focused their attention on making sure product offerings include the latest in energy-efficient lamps and ballasts, fixtures with dimming capabilities, and a full suite of lighting control options.
While we are not out of the woods yet, the lighting industry continues to prove resilient. Careful planning, coupled with short-term incremental growth, seems to be the prudent course. This will aid designers and manufacturers in their decision-making process as they position themselves for the economy's return to full speed ahead in the months to come.
Unemployment Rate: August 2009: Jobs Lost 216,000; U.S. Unemployment Rate 9.7%
Source: U.S. Department Of Labor
Housing Starts: Although housing starts for both single- and multifamily dwelling units increased in June by 3.6%, July numbers have experienced a slight decrease, down 1% to 581,000.
Source: U.S. Census Bureau
Nonresidential Construction Activity: Nonresidential construction spending is expected to decrease by 16% in 2009 and an additional almost 12% in 2010. the retail, hotel, and office sectors also are predicting declines in 2009—28%, 25.8%, and 21.5%, respectively.
Source: American Institute Of Architects (AIA) Semi-Annual Consensus Construction Forecast, July 2009
Architecture Billings And Construction Spending: Although a score below 50 indicates a decline in the demand for services, the AIA's Architecture Billings Index is on an upswing, rising 5.4 points in July to 43.1.
Lighting Equipment Demand: NEMA'S Lighting Systems Index declined 4.3% during the Second Quarter of 2009 to 72-73 POINTS.
Source: National Electrical Manufacturers Association (NEMA)
Industrial Controls Demand: NEMA's Primary Industrial Controls Index fell 6.5%, representing a decline in industrial controls equipment shipments. However, this is a much slower rate of decline than the First-Quarter drop of 23%.
Electroindustry Business Confidence: NEMA's Electroindustry Business Confidence Index for North American conditions rose nearly 12 points in August, to 53.3, which indicates that the business environment for electrical equipment manufacturers is improving.
Compact Fluorescent (CFL) Vs. Incandescent Lamp Demand: NEMA's Incandescent Lamps Index recorded a score of 59.4 for the Second Quarter of 2009. The CFL index increased by 3.8%. purchase of expensive CFLs and their gain in residential-use lamp sales to 26.6% could indicate resumption of consumer spending.