The final day of the EOC Conference held by the National Fluid Power Association included two very interesting, very well-prepared presentations by experts on the economy as it affects the fluid power industry and the markets they serve. The first was given by Jim Meil of Eaton Corp. and his perspective was guarded but optimistic. One of the summary statements that I wrote down from his talk was that the US economy is not necessarily in recession but is feeling the blues.
Jim also reflected on the slumping housing market but made an interesting point that not only is the housing market in a deep slump, it can't get much worse. In fact, our overall economy has been resilient to both the housing and credit crisies. This is helped by very strong exports due to the weaker dollar.
With respect to oil, Jim commented that since the crude cost has now hit the mid $140 per barrel level, corporations that are dependent on oil, must budget accordingly in the future. Now that oil has reached that price, it could easily go there again and we must be aware of that.
Overall, what I got from Mr. Meil's presentation was positive. Even though we face some difficult econonic conditions, we may be past the worst spell for our industry. This is very encouraging and I hope that he is correct.
Finally, Alan Beaulieu, had the anchor presentation and brought home the Conference with a more pessimistic forecast. I gathered from his session that we may still be headed for more difficult times economically and in fact possibly a recession in late 2008 and throughout 2009. Alan cited several indicators that show some rough road ahead. Most of his focus was international and it appears that most world markets face some slowdowns in the near future.
Even still, Alan cautioned us that this is not terrible but simply part of the business cycle and that the recovery will be strong. All things considered, it does seem that we have stable but cautious times ahead with our economy.
The conference provided many very good insights into the past year and a look into the next year. This conference serves as benchmark for the industry and is always very thoughtfully organized.