CSS Monthly Shipments: COVID-19’s Industry Impact Exposed in April

Stats Fact of the Week

NFPA’s April 2020 Confidential Shipment Statistics (CSS) report, a monthly source of fluid power shipment and order data trends that benchmark company performance, revealed COVID-19’s impact on the fluid power industry with extreme declines in month-to-month and year-to-year fluid power shipment and order trends. These types of declines in both trend analysis measures haven’t appeared since 2009, with 20% to 30% declines regarding product shipments and even greater declines of 20% to 50% regarding product orders.

Despite these overall large declines, there is one industry segment that escaped the trend: pneumatic orders. The medical equipment market and its immediate need for large numbers of ventilators and other equipment for COVID-19 victims led to very large orders of pneumatic components, primarily pneumatic valves. Pneumatic orders only experienced a slight decline of 5.5% year-to-year and a decline of 1.2% month-to-month.

What’s yet to be seen is how these massive order declines, and even the slight pneumatic order decline, translate into shipment trends next month. Will shipments decline even further past the 20% to 30% declines observed in April? Will the transition from orders to shipments slow this declining trend? Will medical equipment manufacturers’ demand for pneumatic components translate into an immediate turnaround of pneumatic shipments, or even continued growth for pneumatic orders? While we can’t confidently anticipate the effects of an unprecedented macroeconomic event like COVID-19, resources like the CSS report paint a much clearer picture:

  • Preliminary April 2020 shipments of fluid power products decreased 29.5% compared to April 2019 and decreased 23.0% when compared to March 2020. Mobile hydraulic, industrial hydraulic and pneumatic shipments decreased when compared to last year and decreased when compared to last month.
  • Final March 2020 shipments of fluid power products decreased 9.2% for the 2020 calendar year when compared to the same time period in 2019.
  • The 12-Month Moving Average (MMA) index of 91.8, an indicator of change in the size of the industry, continues to drop below 100, while the 12/12 Ratio index of 91.5, an indicator of change in the rate of growth in the industry, is below 100 as well. The direction and speed in which these two index indicators move, as well as their position above or below 100, can help you understand the short-term outlook for our industry.

Continue to keep a close eye on industry leading indicators, such as Purchasing Managers Index (PMI) and U.S. Industrial Production in NFPA’s Customer Market File (CMF), and use other NFPA resources such as the NFPA Forecast Report: U.S. Customer Markets to track quarterly and annual projections for our industry and key customer markets to further your understanding of how your business may react to the COVID-19 pandemic.

The Confidential Shipments Statistics (CSS) Program is the only monthly source of aggregated industry data for the U.S. fluid power industry. This report presents data on monthly shipments and orders collected from our membership and helps users understand trends and anticipate change within the industry. Member companies can benchmark their own company’s performance against overall industry performance using the CSS results. Data is collected from participating U.S. fluid power manufacturers, compiled by a 3rd party to maintain confidentiality, and results are then only sent to CSS participants.  Enroll to participate in CSS here.

Questions and inquiries about participating in the Confidential Shipment Statistics (CSS) program can be directed to Eric Armstrong at earmstrong@nfpa.com or (414) 778-3372.