CSS Monthly Shipments: Looking for Signs of Light Among an August Slowdown

Stats Fact of the Week

NFPA’s August 2019 Confidential Shipment Statistics (CSS) report, a monthly source of fluid power shipment and order data trends often used to benchmark company performance, continued to display quicker rates of decline among orders. Diminishing orders have begun to directly affect shipment trends as some monthly comparisons to last year reach negative percentages in the double-digits for shipments. Year-to-year and year-to-date percentages are consistently negative, with month-to-month percentages showing signs of positivity only occasionally. Some experts suggest liquidation of inventories is playing a part in some of these declines.

Further confirmation of a slowdown can be seen in the Producer Price Index for Fluid Power. The PPI reached pricing levels not seen since 2012 this spring, but is now below three percent. Time will tell whether lower inventories and lower prices might bolster orders and shipments going forward. In the meantime, continue to keep a close eye on your leading indicators to best predict the pace of decline with industry/product trends.

CSS Monthly Shipments

After reaching pricing level highs not seen since 2012, this decrease in prices may tempt customers to consider increasing product orders soon, especially if inventories are running low at this point.

Preliminary August 2019 shipments of fluid power products decreased 9.9% compared to August 2018 and increased 5.3% when compared to July 2019. Mobile hydraulic, industrial hydraulic and pneumatic shipments decreased when compared to last year but increased when compared to last month.

Final July 2019 shipments of fluid power products decreased 2.3% for the 2019 calendar year when compared to the same time period in 2018. The 12-Month Moving Average (MMA) index of 98.6, an indicator of change in the size of the industry, continues to hover below 100, while the 12/12 Ratio index of 101.7, an indicator of change in the rate of growth in the industry, maintained its level above 100. 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.

Only time will tell if the decline in prices of fluid power equipment has an effect on the rate of decline with industry orders. In the meantime, continue to keep a close eye on your leading indicators to best predict the pace of decline with industry/product trends.

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 third party to maintain confidentiality, and results are then only sent to CSS participants.

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.