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11/10/2014

FPDA Respondents Trim Forecasts for 2015 in Economic Indicator Report

Our fluid power survey indicates underlying demand continues to improve at a measured pace with 3Q sales up 5% following 4% growth in 2Q. The modest improvement in the quarter was driven by very strong oil & gas activity partially offset by declines from ag equipment production. Despite the near-term strength, sources trimmed their forecasts for 2015 as mobile markets are expected to deliver slower growth next year. Highlights of the report include:

  • The September FPDA Index produced a reading of 63.8 up from August’s reading of 57.0. The broader ISM declined to 56.6, down from the 59.0 reading in August.
  • Sources in our fluid power survey indicate sales accelerated in September growing 7% y/y, up from 4% growth in August as 3Q average sales improved 100bp, growing 5% vs 4% in 2Q.
  • Forecasts for 2015 moderated slightly with sources now projecting 5-6% growth down from 6% previously due to headwinds from deteriorating ag equipment production and slower construction equipment growth
  • We see potential for further risk to the 2015 outlook should oil & gas activity decline following the sharp drop in oil prices over the past 90 days. Oil & gas (~10% of industrial sales) has been one of the strongest end markets this year.
  • The September FPDA Index produced a reading of 63.8 up from August’s reading of 57.0. The broader ISM declined to 56.6, down from the 59.0 reading in August.

View the full report here: FPDA Membership Survey Results

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