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% in 2007, U.S. distributors saw a 4.3% 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 of 0.5%, the first loss since 2001. 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% in 2008, off slightly from the 4.1% growth rate posted for 2007. Year-to-date orders of PT/MC products for U.S. manufacturers, however, were down 2.2% in 2008 versus 1.0% 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% for 2008 following relatively flat results in 2007. The annualized sales-to-inventory ratio remained steady at 7.0 at the end of 2008. 
 
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.
 
 
December Channel Sales Decline
In December 2008, U.S. distributors’ overall sales of PT/MC products fell 4.7% 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%. Accounts receivable collection days dropped 3.6% since November 2008. The confidence index of U.S. distributors for November was also unchanged for the fourth consecutive month, remaining at 5.2.
 
Canadian distributors reported a 5.2% drop in sales in December 2008. Sales over the same period last year were up 0.3%. Accounts receivable collection days decreased 1.1% over November 2008. The confidence level of Canadian distributors dropped 0.3 points to 5.0, following four consecutive months at 5.3.
 
Following the November 2008 loss of sales of 16.6%, U.S. manufacturers’ sales dropped again by 10.6% in December 2008. Compared to the same period last year, sales in December 2008 were down 9.8%. Orders in December 2008 were down 8.9% 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% compared to November 2008. Sales were down 14.7% 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). 
 
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.
 
The Market Outlook Report is published monthly by the Power Transmission Distributors Association. For the full report, visit www.ptda.org/store.