The NFPA 2023 Industry Economic Opportunity Conference took place on August 15th and 16th at the Westin Hotel in Itasca, IL. Drawing over 275 professionals from the Fluid Power industry, the event aimed to provide insights into both global and national economic trends.
The conference kicked off with a presentation by Jeremy Bess from ITR Economics. Bess highlighted a key development: the gradual easing of supply chain bottlenecks. While this may appear positive, it’s accompanied by a decrease in demand, resulting in a slowdown of global economic growth. As a likely consequence, a mild recession is expected to emerge by late 2024 and extend into 2025. Particularly for the Fluid Power industry, the next three quarters (Q4 2023, Q1 2024, and Q2 2024) could be challenging. However, there’s an optimistic outlook as the industry is predicted to rebound by mid-2025 in alignment with the global economy.
Sean Metcalfe from Oxford Economics delved into global industry dynamics and the transition within the Energy Markets toward Artificial Intelligence (AI) and Electric Vehicles (EV). While the growth of Global Economic and Industrial Activity in the US, Europe, and Asia is projected to moderate through the rest of 2023, this moderation will hasten industry downturns. Notably, interest rates will play a role in dampening Global Manufacturing. Despite the US economy’s resilience in 2023 driven by robust labor markets and increased consumer spending, a very mild recession is predicted for 2024 due to tighter credit conditions and the alleviation of supply chain concerns.
Emerging technology was covered by Scott Klososky, who focused on Data Science and AI. Klososky emphasized the indispensable relationship between data and AI, defining Data Science as the mastery of leveraging data for generating insights, utilized by both humans and AI to make informed decisions. He also introduced the concept of Decision Science, where analyzed data informs business decisions meeting specific objectives, whether conducted by humans or AI. The trajectory points toward a shift in decision-making: 50% of decisions will be made by machines and 50% by humans, a significant shift from the current 10% machines and 90% humans.
Taylor St. Germain from ITR Economics provided an overview of Global Markets across Key Sectors. Anticipating a downturn in Industrial Production for most economies in 2024, St. Germain attributed this contraction to higher interest rates experienced in 2023. However, a turnaround is predicted for the latter half of 2024, driving robust growth from 2025 to 2029. Both the Hydraulic and Pneumatic sectors within the Fluid Power industry are poised to benefit from this upswing, as Manufacturing stands to gain from the repatriation of Semiconductors and Electric Vehicles.
Adrian Lloyd from Interact Analysis elucidated how Manufacturing Industry Output is determined, focusing on their approach to gathering and processing information for a comprehensive overview of the Global Manufacturing Economy. The company specializes in Industry Automation, encompassing Mobile Hydraulics markets, Robotics/Warehouse Automation, and Commercial Vehicles, including Off-Highway markets. Looking ahead, Lloyd foresees a “down cycle” in 2024 without a global recession, particularly in North America and Europe, while Asia maintains its growth trajectory.
The conference concluded with Jim Meil of ACT Research offering a distinct perspective on the Fluid Power industry. Contrary to the prevailing sentiment, Meil anticipates a slow economy rather than a recession. His outlook for 2023 is cautiously optimistic, characterizing it as fair but not exceptional. Meil expects the Fluid Power industry to gain momentum starting from the fourth quarter of 2023, with an improved outlook for 2024. A primary driver of this positive shift is the release of pent-up demand stemming from the supply chain disruptions observed in 2021 and 2022.