Combining NFPA Resources for More Effective Export Demand Analysis

Stats Deep Dive

As the leading source of fluid power market information in the U.S., NFPA offers a variety of industry analysis and hard data to assist members in planning their next move. While offering such a range of resources can be extremely helpful to most members, for some, it can create the daunting task of pulling together graphs, charts, and data to better explain economic conditions, industry activity, and company performance. In this series of articles, I hope to share some examples of combining NFPA resources to create more effective analysis.

While there are multiple methods to evaluating export demand, the process we will use is much like the method we used to evaluate customer market performance in the last article “Combining NFPA Resources for More Effective Customer Market Performance Analysis.” NFPA offers a variety of resources to help you complete the task.

Basic evaluation of fluid power export demand involves several years of fluid power exports data by country plus the current year’s output forecast for industrial production by country.

Using the fluid power export data by country in NFPA’s U.S. Foreign Trade Data for Fluid Power Products report we can examine the percent change in fluid power exports between 2015 to 2018 to examine some historical trends. The graph above allows us to single out the countries that have performed poorly versus the countries that have performed well over the last four years.

Using NFPA’s Global Market Reports & Forecasts we can examine Oxford Economics 2019 output forecast for industrial production by country. The report’s industrial production output forecast anticipates future change in the output of a country’s manufacturing, mining, and utilities (including machinery), which helps fluid power manufacturers predict growth or decline in demand for fluid power products. The bar chart above shows that the majority of our trade partners anticipate growth in industrial production, with India, China, and Australia leading the way.  Several countries expect decline in 2019, including Germany, United Kingdom, and Mexico.

Using NFPA’s U.S. Foreign Trade Data for Fluid Power Products we can explore each country’s 2018 share of U.S. fluid power exports dollars, which gives us a clearer sense of demand by country. The pie chart above identifies that five countries (Canada, Mexico, China, Germany, and United Kingdom) represent nearly 75% of all fluid power exports.

By combining four-year percent growth totals with current year industrial production output outlooks and adding 2018 export dollar totals for each country (represented by bubble size), we can create a single visual representation of U.S. fluid power export demand evaluation as shown above. As country export bubbles move closer to the upper right-hand corner, demand improves. As country export bubbles move closer to the lower left-hand corner, demand declines. This combined resource visual allows us to reach conclusions, such as:

  • Mexico is big for exports, but historically has slow growth and projected slow growth in its economy. Conversely, Canada is similar in size and historically has slow growth for exports, but also has greater projected industrial production growth going forward. Maybe Canada is a better place to focus.
  • Worried about China and the trade war? Maybe look more closely at export opportunities in Brazil and/or Australia, which together are approaching the size of the Chinese market and have been growing in terms of exports from the U.S. Both also have growing markets as measured in forecasted industrial production growth.

Access NFPA Market Information Resources
NFPA’s timely and accurate industry statistics allow our members to understand trends and anticipate change with a variety of industry reports, forecasts, and data sources for fluid power products, customer markets, and economic indicators.

Questions and inquiries about NFPA’s Market Information Resources can be directed to Eric Armstrong at earmstrong@nfpa.com or (414) 778-3372.