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2008 Sales Growth for PT/MC Distributors and Manufacturers Below 2007 Levels According to PTDA's Year-End 2008 Market Outlook Report

Year-End 2008 Analysis
December 2008 Analysis

Year-End 2008 Analysis

Chicago, Ill. -- February 19, 2009 -- In releasing 2008 year-end sales data for distributors and manufacturers of power transmission/motion control (PT/MC) products, the Power Transmission Distributors Association (PTDA) reported that U.S. distributors and manufacturers experienced overall growth in sales in 2008 while their Canadian counterparts experienced a decline in sales.  Confidence in the market (as measured on a scale of 1 to 10 with 10 being most optimistic) has eroded overall, holding a current neutral position between 4.6 and 5.2 versus a range of 5.0 to 5.8 at year-end 2007.

Growth in sales of PT/MC products is definitely slowing.  Following a moderate growth rate of 6.6 percent in 2007, U.S. distributors saw a 4.3 percent increase in PT/MC product sales in 2008.  The annualized sales-to-inventory ratio for 2008 was at 6.5, compared to 7.6 in 2007.

Canadian distributors ended the year with a drop in sales, the first loss since 2001.  Distributors of PT/MC products in Canada ended 2008 with a decrease in sales of 0.5 percent compared to a gain of 1.3 percent in 2007.  The annualized sales-to-inventory ratio for Canadian distributors showed a slight increase from 6.4 in 2007 to 6.5 in 2008.

U.S. manufacturers of PT/MC products experienced year-to-date sales growth of 3.8 percent in 2008, off slightly from the 4.1 percent growth rate posted for 2007.  Year-to-date orders of PT/MC products for U.S. manufacturers, however, were down 2.2 percent in 2008 versus 1.0 percent growth for 2007.  The annualized sales-to-inventory ratio dropped slightly from 10.0 at year-end 2007 to 9.7 at year-end 2008.

Canadian manufacturers’ sales suffered in 2008, with a decrease in sales of 7.4 percent for 2008 following relatively flat results in 2007.  The annualized sales-to-inventory ratio remained steady at 7.0 at the end of 2008. 

In considering sales growth on a product-by-product basis for 2008, product categories for U.S. manufacturers showed an overall growth in sales with only two product categories experiencing sales declines – mounted bearings and positioning systems/linear motion products.  Canadian manufacturers, on the other hand, showed an overall reduction in sales with only three product categories showing sales growth – variable speed drives, clutches & brakes and shaft couplings.

U.S. Manufacturer Percent Change in Product Sales (2007 vs. 2008)

Canadian Manufacturer Percent Change in Product Sales (2007 vs. 2008)

December Sales Results Continue to Reflect Slowing Markets

In December 2008, U.S. distributors’ overall sales of PT/MC products fell 4.7 percent when compared to November 2008.  When matched up against sales in the same month last year, sales in December 2008 were down by 1.1 percent.  Accounts receivable collection days dropped 3.6 percent since November 2008.  The confidence index of U.S. distributors for November was also unchanged for the fourth consecutive month, remaining at 5.2 (on a 10-point scale).

Canadian distributors reported a 5.2 percent drop in sales in December 2008.  Sales over the same period last year were up 0.3 percent.  Accounts receivable collection days decreased 1.1 percent over November 2008.  The confidence level of Canadian distributors dropped 0.3 points to 5.0, following four consecutive months at 5.3 (on a 10-point scale).

Following the November 2008 loss of sales of 16.6 percent, U.S. manufacturers’ sales dropped again by 10.6 percent in December 2008.  Compared to the same period last year, sales in December 2008 were down 9.8 percent.  Orders in December 2008 were down 8.9 percent over November 2008.  The confidence level of U.S. manufacturers rose to 5.1 (up 0.2 points over November 2008 levels on a 10-point scale).

Canadian manufacturers’ sales were down 7.6 percent compared to November 2008.  Sales were down 14.7 percent when compared to the same period last year.  The confidence level of Canadian manufacturers dropped to 4.6, down 0.2 from last month’s level (on a 10-point scale). 

Sales between November 2008 and December 2008 in specific product categories reflect the change in sales experienced by U.S. and Canadian manufacturers.  All product categories for U.S. manufacturers posted a decrease in sales while Canadian manufacturers saw growth in sales in three product categories—gear products, positioning systems/linear motion products and shaft couplings.

U.S. Manufacturer Percent Change in Product Sales (November 2008 vs. December 2008)

Canadian Manufacturer Percent Change in Product Sales (November 2008 vs. December 2008)

The Market Outlook Report is published monthly by the Power Transmission Distributors Association.  The full report includes month-to-month and year-to-year changes for the current and the previous year in sales, inventory and accounts receivables for U.S. and Canadian distributors as well as a general confidence index.  U.S. and Canadian manufacturer data includes a confidence index as well as sales and order trends for mounted bearings, unmounted bearings, standard industrial motors, variable speed drives, positioning systems/linear motion products, gear products, clutches and brakes, shaft couplings and mechanical drive systems and other PT products. 

Year-end data for 2007 and 2008 is available in a complete report.  The monthly data is available by subscription via e-mail or mail.  To purchase the year-end data or to begin a subscription to the monthly data, order online at www.ptda.org/store or call PTDA at +1.312.516.2100.  PTDA members may download the report at no charge through the PTDA web site at www.ptda.org/MOR.

Founded in 1960, the Power Transmission Distributors Association (PTDA) is the leading association for the industrial power transmission/motion control (PT/MC) distribution channel.  A U.S.-based trade association, PTDA represents 204 power transmission/motion control distribution firms that generate more than $10 billion in sales and span 3,500 locations in North America and 12 other countries.  PTDA members also include 198 manufacturers that supply the PT/MC industry.

PTDA is dedicated to providing exceptional networking, targeted education, relevant information and leading-edge business tools to help distributors and manufacturers meet marketplace demands competitively and profitably.  For more information, visit www.ptda.org.