Our staff recently attended the Industry and Economic Outlook Conference (IEOC) presented by the National Fluid Power Association (NFPA). This annual event presents to individuals and companies making up the fluid power industry a review of the past year and a forecast of the coming year.
Several economists presented their review and forecasts representing the overall U.S. industrial market, the global market, and specifics on market segments where fluid power is used such, as construction equipment and automotive plants. A year ago, the forecast was very optimistic, and the review of 2010-11 was very good as well.
The big picture presented at this year’s IEOC was still optimistic but guardedly so, with a projection of slow growth through the end of 2012 and continuing through most of 2013. There was some disagreement between the economists as to what will happen after mid-year 2013 varying between the start of a mild slowdown to continued slow growth.
The key takeaway from this meeting was that no major slump is imminent in the coming years, but the strong recovery has slowed down, and a slight downturn will occur at some point — no reason for alarm. This is great news compared to the Great Recession and the havoc it wreaked on the fluid power industry in 2009-10. That was our economic cliff event.
The other cool thing that was made very clear from the many charts presented by the expert speakers at the IEOC was that the recovery for fluid power in general and most of our end-use markets was truly V-shaped. I remember hearing about L-shaped and W-shaped recoveries a few years ago, but they did not materialize. Instead, we experienced quite a nice recovery since the bottom in 2009.
We thank the NFPA for this very helpful event that we all count on every year. Thanks also to the experts like Brian Beaulieau, Eli Lustgarten, and Jim Meil for sharing their insights with the industry. We are fortunate to have such a strong association representing fluid power providing for the exchange of information and ideas.
Just as users of fluid power components and systems rely on the quality products produced in our industry, marketers of these products have come to rely on excellent economic information that is provided every year at the IEOC. I am looking forward to a very stable fourth quarter of this year and a continuation through 2013.
Michael Ference, publisher