This is a part of the 2017 Distribution Trends Special Issue. The annual feature was researched and written by MDM based on interviews with dozens of distributors, industry experts and manufacturers. MDM also conducted a survey of its readers to uncover the trends outlined in this issue.
2017 Distribution Trends Special Issue
Smaller and smarter define the trend for product demand in the fluid power sector. As the internet of things grows, demand has increased for the inclusion of sensors on fluid power products – for example, position and load sensors on actuators – in order to improve remote monitoring and predictive maintenance. Distributors are trying to expand their capabilities in this area through acquisition and by hiring engineers who understand the new dynamics.
New technology requires new skills and an increase in R&D for effective application. Fluid power technologies are already in use across a broad range of industries. But as technology advances, distributors and manufacturers note a need to invest more in expanding the knowledge and application base for people and products.
Distributors targeting the health care industry as a market for growth. "Given the aging population and long product life cycles," health care and other medical-related industries are an obvious target for growth, according to one respondent to the 2017 MDM market trends survey. While foodservice is also a core target identified by distributors, that industry tends to be more stable and less affected by economic conditions – which means stable sales, but less growth opportunity.
Tough energy markets are starting to stabilize, but remain a challenge. With oil prices stabilizing and new government focus on coal, customers involved in the energy sector are starting to increase activity again. But no one is forecasting a return to the recent boom levels for the near-term. Alternative energy also continues to be an opportunity, but without as much federal government support as seen in the prior administration, it also faces some market growth challenges.
Merger & acquisition highlights in 2016:
Applied Industrial Technologies, Cleveland, OH, acquired S. G. Morris Co.
Average growth for companies on the Fluid Power Market Leaders list: -5.5%