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Most expect no worse than moderate sales increases in 2003. And on balance, PTDA member firm projections for the coming year are more optimistic than in 2002.
The outlook, however, isn't without caution and caveats.
Concerns about the lingering recession ' one that has hit industrial markets especially hard ' remain top-of-mind for many North American power PT/MC distributors and manufacturers. Moreover, general business uncertainties tied to possible repercussions of military action in Iraq are ill-timed distractions heading into 2003.
"I think we're facing another struggle until things are settled with Iraq," said Carlton Harvey, general manager of Jamaica Bearings Company, Inc. of New Hyde Park, N.Y. "Not only is there angst about what's going in the Middle East, we've got issues with markets here at home because of the Enrons."
Mike Pelehach, president of the Jeffrey Chain Corporation of Morristown, Tenn., echoed the sentiment, but believes many firms can succeed in the current climate.
"I think a lot of what will happen this year has to do with the political situation," Pelehach said. "But I'm cautiously optimistic for the year. I think companies that get back to the fundamentals of providing their customers with value in their products and services have the best chance to grow."
"But companies that expect to grow will have to outperform competitors," he added. "The overall market isn't growing; it's a question of increasing market share."
Distributors Mostly Positive
Even if the PT/MC marketplace is mature, over 80 percent of the 51 distribution firms that responded to PTDA's survey project sales increases for 2003. Last year, 64 percent of distributors expected sales growth.
For the second straight year, a distinct group of distributor respondents (21.6 percent) envision sales gains of more than 10 percent. However, nearly three-fifth of the overall sample (58.9 percent) forecast sales will grow between two and 7.9 percent. Roughly 12 percent of the respondents project sales increases of two percent or less.
"Once things in Iraq are resolved ' and assuming nothing else bad happens ' I think a lot of pent-up demand will be released," said Philip Derrow, president/CEO of Ohio Transmission Corporation based in Columbus. "We're generally optimistic. We achieved many of our objectives in 2002 including an increase in revenue. We're forecasting single-digit revenue growth in 2003 and a nice growth in profitability."
Many PTDA member distribution firms, such as Transmission Engineering Co. Inc, based in Hatfield, Pa., expect business upturns based on their strategic plans and changes, not just improved conditions.
Meanwhile, just under 10 percent of distributor survey respondents said sales will remain constant. Another 10 percent think sales will slip in the coming year.
Although most distributors are optimistic, about two-thirds of distributor survey respondents said the overall economy remains in decline. However, 82 percent projected the downturn would end by the end of Autumn 2003. Of this group, members were evenly split whether an upturn would begin in spring, summer or fall.
Manufacturers' Outlook Also Upbeat
Nearly all (92.8 percent) of the 42 manufacturer respondents to the member forecast survey project sales gains in 2003. Last year, slightly more than 60 percent envisioned sales growth.
For 2003, the bulk of manufacturer respondents (61.9 percent) expect sales will grow between two and 7.9 percent. Meanwhile, 23.8 percent project sales expansion of more than eight percent, and 16.7 percent are gunning for