The meltdown that has hobbled the overall U.S. economy finally hit the controls industry in 2001's third quarter. This industry had held its own earlier this year, when many other industries were foundering. However, the CE index suffered a 25% decline from the second to the third quarter, and it even performed a little worse than the Dow Jones and S&P 500, which both suffered approximately a 15% decline in that period.

Meanwhile, as might be expected, the beleaguered NASDAQ sustained an even bigger loss of 31%. The NASDAQ has suffered for the better part of a year with big hits sustained among many high-tech and dot-com companies.

In addition, U.S. gross domestic product declined 0.2% in 3Q01, and analysts expect the fourth quarter to be about 2% lower. If this occurs, the nation will enter-at least somewhat officially-a recession. This will undoubtedly affect the controls industry, though its performance should not be as bad as the general economy. This is because controls will probably resume its rollercoaster ride on market value, and go back up to near where it belongs.

The earnings picture for the controls industry has been solid for the past few years, though it has also declined slowly, except for 2001's calamitous third quarter. As with the rest of the economy, there is hope that this and many other industries will all rise from the World Trade Center's ashes, and resume the growth that is their underlying strength.