Slower economy unfolding in 2001— except in industrial controls

Based on data for the fourth quarter of 2000, many economists are painting a grim picture for much of 2001. Rising energy costs and declining consumer confidence have combined to create a bleak forecast—at least for 2001's first half. Users post big gainsIndividual user industries all posted sales increases with Utilities and Oil, Gas & Coal leading the way.

George J. Blickley, consulting editor

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Based on data for the fourth quarter of 2000, many economists are painting a grim picture for much of 2001. Rising energy costs and declining consumer confidence have combined to create a bleak forecast-at least for 2001's first half.

Users post big gains

Individual user industries all posted sales increases with Utilities and Oil, Gas & Coal leading the way. The weighted average of the users indicated a 24% increase in sales from 1999 to 2000.

The users' composite profit profile was even better, showing a 47% increase during the same period. All applicable industries had positive profit gains. The Oil, Gas & Coal industry experienced a whopping 133% profit increase-no doubt attributable to large price hikes during 2000.

Controls users and suppliers performed better than the overall U.S. economy during 2000

Suppliers secure increases

Control suppliers performed equally well with composite increases of 16% in sales and 27% in profits from 1999 to 2000. Individually, the Instruments segment did very well with a 30% increase in sales and a 73% increase in profits, while the Electrical Products had a lackluster, though still positive, increase of 7% in sales and 3% in profits.

Closer examination of just 4Q99 and 4Q00, however, slightly dampens the users' and suppliers' overall exuberance. Two leaders among the user industries-Utilities and Oil, Gas & Coal-continued their last-quarter growth at about the same pace as the full-year comparison. The other industries had nearly the same growth quarter-to-quarter as year-to-year, but profits were all negative and down significantly in some cases.

Supplier industries in the 4Q99-to-4Q00 analysis performed just about the same as in the year-to-year comparison, though there was a slightly negative (-4%) drop in Electrical Products' profits.

All in all, the users and suppliers of industrial controls performed better than the economy in general in 2000, and are in position to do the same for the rest of 2001.