BFPA Economic Forecast Seminar 2019
28 Oct 2019
45 delegates from 26 BFPA and BFPDA member companies attended BFPA’s 2019 Economic Forecast Seminar on 9 October held at Niftylift’s superb manufacturing facility in Milton Keynes. As usual, the central focus of the day was the latest five year fluid power industry forecast (for 2019-2023) and global economic update from Oxford Economics, with supporting presentations from the Food and Drink Federation and Niftylift.
Jeremy Leonard, Director of Global Industry Services opened the event with an overview of the main economic developments in the past year.
Oxford’s assessment of the global outlook was one of widespread industrial weakness, with Europe being especially weak, which would lead to a growth slowdown, but in their opinion, not a full blown recession.
A global trade slowdown had already begun before the recent escalation in the US-China trade wars exacerbated the problem resulting in a reduction in industrial activity as indicated in a downturn in G3 investment indicators, however the service sector appears to have been more positive, boosting overall activity.
Closer to home, the Eurozone industrial sector was technically in recession with confidence at its lowest level for over five years and Germany especially worried about Brexit and the effect on the German automotive market. The UK figures were being held up by the service sector but industrial production was definitely causing a drag on GDP as the uncertainty surrounding Brexit continued to be the main reason for a lack of investment across most sectors.
The second part of Jeremy’s presentation focused on the short and medium term prospects for fluid power. BFPA’s monthly survey data for both hydraulics and pneumatics had been strong in the first half of 2019 with anecdotal evidence supporting stock piling in advance of the first March Brexit deadline as one possible explanation for the strong early months of the year, together with a strong indirect export demand as a result of a weaker pound following the referendum. However recent data through to August had indicated a slowdown from the high levels earlier in the year and Oxford were forecasting a longer term downward trend towards the end of 2019, with a difference in performance in the key end user industry sectors as usual. Oxford’s forecasts are based on an orderly Brexit, but due to the proximity to the latest Brexit deadline of 31st October, an alternative scenario for a “No-Deal” Brexit was also presented. The detail and longer term forecasts are included in the full report available from the BFPA.
Nicki Hunt of the Food and Drink Federation then gave a very interesting and detailed presentation covering the current trends and Brexit implications in the very important food and drink sector – an important end user industry for pneumatics.
The sector is very fast moving and constantly having to keep up to date with the latest issues affecting its members – its current priorities were listed as:
- Brexit
- Industrial Strategy
- Diet and Health
- Plastics and Packaging
- Retailer consolidation
- Food safety and science
Nicki gave a fasciniating insight into each of these topics, with innovation and automation likely to offer solutions to some of the challenges facing the sector, which in turn could offer opportunites for fluid power suppliers.
Brexit will certainly have a major impact on the sector with all sorts of challenges looming for companies involved in the supply chain (tariffs, logistics, shelf life, labelling, certification, warehousing, origin and workforce to name but a few!). On the up side, opprtunites had presented themselves: domestic sourcing and demand had increased, and there is some opportunity for future regulatory divergence and investment in machinery which could provide an opportunity for growth.
The day finished with a brilliant presentation from Niftylift covering the growth of the company from its garden shed origins to todays multi million pound globally successful business, and the factory tour was fascinating too.
BFPA is indebted to Niftylift for allowing us to hold our event at their superb facility.
For more details on how to purchase a copy of the 2019-2023 BFPA Fluid Power Forecast and proceedings from the day, or anything contained in this article please contact Sarah Gardner at sarah@bfpa.co.uk