BFPA Economic Forecast Seminar 2021

21 Oct 2021

Around 60 delegates from 24 BFPA and BFPDA member companies attended BFPA’s second Economic Forecast Seminar on 6 October which was held on zoom, partly by popular demand and partly due to Covid restrictions. As usual, the main focus and aim of the event was for Oxford Economics to provide members with a global and UK economic update, followed by their latest five-year fluid power industry forecast (for 2021-2025).

Jeremy Leonard, Director of Global Industry Services opened the event with an overview of the main World and UK economic developments in the past year.

In contrast to the presentation last year, when the world was battling with the impact of the Covid-19 pandemic, the mood this time was much more positive.

Global indicators provided evidence of the rapid recovery from the pandemic recession across the world, however supply chain pressures within manufacturing (largely linked to the pandemic and new variants) were now causing major problems and having a drag effect on output growth, despite demand continuing to be strong.

Oxford Economics’ view is that when consumer spending accelerates (probably over the next few years as the country opens up again), the services sector will take over the baton from in the industrial sector as the driver of future growth, although the point was also made that firms also have plenty of cash reserves (from the Furlough schemes etc.) which might benefit the manufacturing sector through investment in new machinery in the next few years.

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 indicated that the momentum of the recovery (which started at the end of 2020) might be ebbing after the rapid initial recovery. The sectoral overview highlighted the differences in performance of the various sectors, with construction doing well but automotive hampered by material and components supply (including semi-conductors).

Oxford’s forecasts for 2021 up to 2025 were discussed as were the assumptions behind the figures – this year will end with both hydraulics and pneumatics ahead of pre-pandemic levels. The detail and longer-term forecasts are included in the full report available from the BFPA.

F or more details on how to purchase a copy of the 2021-2025 BFPA Fluid Power Forecast and proceedings from the day, or anything contained in this article please contact Sarah Gardner at sarah@bfpa.co.uk