When the Power Transmission Distributors Assn. polled members for its 2003 Member Forecast Survey in late 2002, the results were almost predictable, based on the overall economy, manufacturing recession and customers' unwillingness to make capital investments unless absolutely necessary

While 36 percent of PTDA's distributor members say the economy is in a period of growth, a full 64 percent feel it's still declining. Effects from the economic downturn include margin pressure, customers closing facilities and consolidation of suppliers. Thirty-two percent of distributors expect the decline to end in spring 2003; 29 percent expect relief by summer.

"It's been tough everywhere, particularly in the manufacturing arena," says Jim Stahl, president and owner of Cincinnati Belting and Transmission in Dayton, Ohio. "Capital spending was down across the board, and we saw more of the manufacturing slump than most."

Strong sectors, says Stahl, were food, bottling and consumer goods companies like Procter & Gamble. One particular printing machine manufacturer, he adds, is "going like gangbusters," while several others are posting healthy gains and still making capital investments.

North of the border, business wasn't any better for power transmission distributors in 2002. According to John Morrison, director of marketing and operations for Independent Distributors Inc., in Ontario, many PT distributors struggled to maintain market share. Working against them, he adds, was the flat performance of the Canadian automotive sector – a primary economic driver for Ontario.

"Many of our members embraced other product areas, such as industrial supplies and fluid power, to supplement the lack of growth in the PT market," says Morrison. "Most feel that 2003 may grow a bit, but they're not overly optimistic that it will be a banner year."

In Waterloo, Ontario, Lou Dietrich of Excel Bearings Inc., says the market for his firm's products has lagged for about 18 months. Consumption for long-term capital projects has been particularly slow, he says, while consumption for maintenance has remained steady.

But things are booming in Las Vegas, where Stephen Philpott, president of Bearing Belt Chain Co., says business has been steady, mainly because of the state's population growth and hunger for more development to accommodate that inflow. "We're fortunate to be in the fastest growing state, county and city in the nation," says Philpott, adding that construction is particularly strong, while traditional industries like mining are flat.

With several new hotels underway and new homes being built to support the employees who will work in them, Philpott predicts a further upswing in construction over the next two years. "We're getting a pretty optimistic feeling from our customers," says Philpott, who foresees his firm growing by five to 10 percent in 2003.

In Columbus, Ohio, the picture isn't quite as rosy. Phil Derrow, president and CEO of Ohio Transmission Corp., says the market has been flat or down for two years, but adds that the company has posted yearly growth. He credits some of that growth to Japanese automakers and the transplant feeders that supply them.

"It's really anyone's guess as to whether it gets better from here," Derrow says. "Historically, the U.S. market always improves after recessions, so an increase is inevitable, it's a question of when it will come."

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