First half of 2000 shines for control users, suppliers

The first half of 2000 turned out to be rosy for the controls industry due to increasing sales and profits earned by users and suppliers of control products, especially when performance is compared with industry as a whole. These results were tallied in Business Week magazine’s Scoreboard, which compared performances of more than 900 companies during the first halves of 2000 and 1999. Likewise, the scoreboard’s All-Industry composite showed a 16% increase in sales from 1999 and a 21% increase in profits. This certainly reflects the robust economy in general-and even exceeds it.

Better yet is how much improved users of controls performed in this period. From a modest 6% increase in sales for the Food Processing industry to a whopping 59% increase in the Oil, Gas & Coal segment, the composite increase for users sales was 26%. Other large sales increases among the user segments included 28% for Utilities, 23% for Metals & Mining, and 21% for Paper. This bodes well for the suppliers because it means capital expenditures will be made to keep up with demand, which will result in more purchases of controls.

Even more encouraging for suppliers is the change in profits among the user industries-all positive-which doesn’t usually occur. Food Processing again showed the lowest increase of 13%. Meanwhile, Oil, Gas & Coal and General Manufacturing segments showed tremendous profit increases of more than 190%. Other outstanding profit increases by users included 111% for Machinery and 63% for Paper.

While suppliers industries didn’t improve as much as the control users, the suppliers were also much improved from 1999’s first half. The Electrical Products segment didn’t do as well as Instruments, but again the figures were positive, rather than negative, as they have been in the recent past. In fact, Instruments performed far better than the overall user composite, with sales increasing 31% and profits up 75%. Meanwhile, sales and profits for suppliers of Electrical Products increased 9% and 8% respectively. When the figures are combined, the suppliers’ composite increases of 19% in sales and 36% in profits are very encouraging, even though they remain slightly behind the users’ composite.

These first half performances may provide some insight into how 2000 will end for industrial controls suppliers. Their figures suggest that an upward trend is occurring, and users’ figures only add to this confidence.

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