Complete Story
10/09/2013
Economic Trends Report Shows Demand Below Expectations
The September survey had 49 respondents comprised of 34 distributors and 13 manufacturing firms.
FPDA Index – The August FPDA Index produced a reading of 54.7, up from July’s reading of 52.3. The broader ISM index showed a reading of 55.7 in August, growing from July’s reading of 55.4.
Demand continued to trend below expectations in August due to continued weakness in mobile OEM end markets softening oil field demand and project delays in the month. Inventory destocking continues to weigh on results as sources reduced inventory levels sequentially for the fifth consecutive month.
We anticipate some improvement in our September work as we reach the one-year anniversary of the beginning of the OEM downturn in September 2012 and the month is helped by easier comparisons and an additional selling day. September is the most important month of 3Q and could help offset weakness reported in July and August.
August fluid power sales trended below expectations again this month with a net 37 percent of participants reporting sales fell below plan, vs. the net 37 percent in July.
The outlook remained stable as participants continue to anticipate a 1 percent decline this year, consistent with the trends reported for the first 8 months of the year.
Inventories declined in August but at a slower rate than July with a net 5 percent sources reporting lower inventories (26 percent higher, 44 percent same, 30 percent lower) compared to a net 10 percent last month.
