Fluid power sales flow in '97
By Staff -- Industrial Distribution, 1/1/1998
Distributors experienced a good year in 1997, and that was the case in the fluid power industry as well. According to the National Fluid Power Assn., the industry was up 12 percent through October, and Steve Latin-Kasper, economist and statistical services manager for NFPA, sees no slowdown in sight."Things may not continue this strong, but we don't expect any major downturns certainly through the end of this decade,'' says Latin-Kasper. "We don't see a major recession coming up, even with the current financial difficulties with the Asian countries.''
The United States is the largest market for fluid power in the world. Total fluid power production in 1996 was $10.9 billion, and 1997 was expected to come in at $12.2 billion. The industry consensus forecast for 1998 is for a 4.6 percent increase in U.S. fluid power shipments.
Latin-Kasper attributes the strong sales results to "broad economic growth. All segments of the industry are growing,'' he says, noting that construction equipment, the aerospace industry and farm equipment all experienced strong gains in 1997.
NFPA, along with the Fluid Power Distributors Assn., expects to see continued growth in the aerospace sector in 1998. Expansion in the farm and construction equipment segment is expected to slow substantially.
"We expect to see growth, but not at as high a rate as last year,'' says Latin-Kasper. "There has to come a point in time when we just don't need any additional construction equipment out there, especially if government spending on infrastructure remains the same.''
According to the FPDA's latest Outlook Survey, sales continue to run ahead of target for 1997, with distributor sales gains forecast to be in the area of 9.1 percent. Sales will climb further in 1998. Orders were strong in the third quarter -- up by 16 percent -- but were expected to slow in the final quarter.
The Midwest-West region had the highest sales for 1997, at $329.5 million. However, the Northeast experienced the biggest growth in 1997, with a 15.7 percent increase. The West region is expected to see the most growth in 1998, with a 5.7 percent increase.
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