The first half of 1998 was a little disappointing for the controls industry market, but it wasn't all that great for the U.S. market in general. While the Dow Jones danced around the 9,000 mark, it and the other indexes increased only 1—3%. On the other hand, the Control Engineering index decreased about 3%. Despite the recent downturns, some research showed the overall industry experienced an 1% average increase in EPS, topping the collective performance of these 13 companies.

This decrease was reflected in the CE Market Value Index (see graph), but even there the drop isn't as bad as it looks. Much of the large decline was caused by the 7% and 16% market price drop of two of that index's largest companies. Six other companies also showed decreased market value.

The earnings picture for the controls industry also fell as shown in the CE Earnings per Share Index (see graph). The drop in earnings per share (EPS) for the last three months was due mainly to EPS decreases by a few companies that make up proportionately more of the overall index. Consequently, slight declines in their EPS have a greater effect on the overall figure.

The overall economy for 1998's first half was not too bad, but not as good as the very satisfactory four quarters for 1997 and certainly not as good as 1997's blazing last two quarters. However, economists and industry analyzers are generally optimistic about the second half, and believe 1998 will turn out to be as good or a little better than last year.

If these predictions come true, the recent dip in the controls industry's performance should turn out to be nothing more than a correction by the overall economy. The second half of 1998 should see the controls sector resume its usual outperformance of most other industries.