04/10/2015

March Cleveland Research Report Shows Oil & Gas Continue Deterioration

FPDA’s March survey, based on February reporting, had 31 respondents comprised of 24 distributors and 7 manufacturing firms.

Cleveland Research’s fluid power work indicates activity failed to recover from the weak start to the year as a further reduction in oil & gas markets and a slight headwind from weather hurt sales in February. Manufacturer orders declined for the second month in a row with order softness coming from oil & gas customers. The 2015 outlook was left unchanged in the month but we continue to expect a ~200-300bp headwind from deteriorating conditions in oil & gas markets.

The February FPDA Index produced a reading of 50.5, down from 53.3 in January while the broader ISM moderated to 52.9, down from the 53.5 reading last month.

Sales were up 2% in February, in line with January, with weather and another step down in oil & gas markets blamed for soft trends.

Manufacturer orders remained negative for the second month in a row (down 1% in February, vs down 2% in January) with oil & gas blamed for the weakness. Sources continue to forecast 5-6% growth in 2015 as the pending weakness from oil & gas markets, which we expect to be a ~200-300bp headwind, is not yet reflected.

Read the full report here: Fluid Power Survey Results March 2015