01/12/2015

Cleveland Research Report Notes Impact of Ag Weakness and Oil and Gas Investment

Cleveland Research has published its latest economic indicators report for the fluid power industry.  The November survey had 39 respondents comprised of 28 distributors and 11 manufacturing firms.

The impact of the Ag equipment weakness combined with the expectation for oil & gas investment to roll over in 2015 leads us to expect a weaker year in 2015 and we see risk to the current outlook.

Highlights of the report include:

•          The November FPDA Index produced a reading of 49.1 down meaningfully from 62.5 in October. The broader ISM moderated slightly to 58.7, up from the 59.0 reading last month.
•          Our fluid power survey indicates sales grew 3% in November, slowing from 5% in October as growth fell short of expectations with a net 23% of participants missing plan (worst reading since Feb. 14), deteriorating from a net 2% in October.
•          Sources in our fluid power survey left the 2015 outlook unchanged, expecting 5% growth, similar to 2014 growth. We see risk to the downside for 2015 as current outlooks do not appear to adequately reflect the deterioration in oil prices over the last 120 days.

Read the full report here.