Control companies generally kept pace with the U.S. stock market in 1998, and even exceeded it in the fourth quarter (4Q98). The Control Engineering Stock Index jumped 20.5% during 4Q98, compared to a 17% increase in the Dow Jones Industrial Average. CE Index gains also paralleled increases in the S&P and NASDAQ indexes.However, while the Dow increased 16% during all of 1998, the CE Index lagged with a 6.5% annual gain.

Gloomy predictions of much lower earningsfor U.S. companies proved to be groundless. The controls industry, however, didn't paint as pretty a picture, showing a slight decline to 0.93 for the CE Earnings per Share (EPS) Index during 4Q98. Compared to 3Q98, 10 of the 13 companies posted greater earnings, one remained the same, and one showed fewer losses.

Similarly, the market value of control companies increased significantly in 4Q98 after generally declining for several quarters. This was fueled more by investor confidence in this sector's companies than it was caused by the firms' actual performance. However, since this confidence is generally based on expectations of future performance, it bodes well for the control industry.

Particularly in 4Q98, the overall U.S. economy performed better than expected and added yet another notch to this century's longest running economic boom.