Worth noting, based on our research, the industry as a whole has regained virtually all lost ground and stabilized at levels existing prior to the commencement of the economic decline in 2008 – 2009.
With both GDP and industrial production moving in a positive direction, the demand for equipment that requires hydraulic actuators is improving. Of course, this positive contribution is being somewhat offset by softness in the commodity dependent sectors such as agriculture, mining and oil & gas. The report also comments on the potential threats posed by the fragile global economy and a strong U.S. dollar that may put pressure on exports and allow imports of hydraulic cylinders to be more cost competitive. Primarily driven by advancements in new technology and continued emphasis on quality, U.S. domiciled industry participants are expected to experience a positive future.
In addition, the report addresses recent industry M&A activity. We believe a fairly robust market exists currently – likely reflective of 1) emphasis on gaining global scale 2) efforts to achieve broader, stronger, product portfolios, 3) important private equity interest in the industry, and 4) market valuations meeting private owner expectations.
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