The health of the hydraulic fluid power equipment industry is greatly tied to the performance of the U.S. economy and the U.S. manufacturing sector. Industrial production is generally boosted by a strong economy, leading to increased demand for hydraulic fluid power products. In a recession, manufacturers reduce capital spending, weakening demand for these products.
In 2004, U.S. gross domestic product (GDP) grew at its fastest pace since the late 1990s. The hydraulic fluid power equipment industry benefited greatly from this, as overall manufacturing activity boomed and demand for this equipment skyrocketed. Economic growth may be tempered a bit over the next few years as gasoline and energy prices impact consumer spending and, ultimately, manufacturing activity. Nonetheless, the economy is expected to grow at a modest pace, which will continue to have a positive effect on demand for hydraulic fluid power equipment.
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