CSS Monthly Shipments: September Shipments Continue to Decline

Stats Fact of the Week

NFPA’s September 2019 Confidential Shipments Statistics (CSS) report, a monthly source of fluid power shipment and order data trends often used to benchmark company performance, continued to display decline in both shipments and orders trends. Contracting hydraulic order and shipment trends are contributing to the majority of year-to-year and year-to-date declining percentages of overall fluid power products, while both hydraulic and pneumatic trends contributed to the fluid power month-to-month decline. Experts continue to suggest that inventory liquidation, low fluid power product demand, and foreign trade policy and tariff uncertainty are the leading contributors in the fluid power industry’s continued decrease.

Preliminary September 2019 shipments of fluid power products decreased 6.0% compared to September 2018 and decreased 5.9% when compared to August 2019. Mobile hydraulic, industrial hydraulic, and pneumatic shipments decreased when compared to last year and decreased when compared to last month.

Final August 2019 shipments of fluid power products decreased 3.3% for the 2019 calendar year when compared to the same time period in 2018. The 12-Month Moving Average (MMA) index of 97.7, an indicator of change in the size of the industry, continues to hover below 100, while the 12/12 Ratio index of 100.1, 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.

For several months, I have suggested to keep a close eye on your leading indicators. One of our industry’s most popular leading indicators, Purchasing Managers Index (PMI), increased for its first time in months. The relationship between PMI (raw data) and fluid power product shipments (raw data) currently correlates at 75.4% with a seven-month lag length. You would read this relationship as, when the PMI increases/decreases from one month to the next, there is a 75.4% chance that fluid power product shipments will experience the same trend seven months later.

While the increase is minor and the PMI panel stated that the industry “more cautious than optimistic” about it, keep an eye on this leading indicator and let’s see what unfolds in the coming months.

The Confidential Shipments Statistics (CSS) Program

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.

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.