FABTECH to be a growth portent

Oct. 1, 2009
Survey says: sales may increase slightly in Q4

Survey says: sales may increase slightly in Q4

Looming right around the corner is FABTECH (technically FABTECH International & AWS Welding Show, Including Metalform) like a caged animal. Will it be a bull springing from the windy mid-November streets of Chicago or a hibernating bear that raises it’s head, sniffs the economic air, and goes back to sleep? Maybe the results of a recent survey of laser cutting system suppliers that sell into the North American market give a clue.

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The question asked related to their view of the 4th Quarter 2009 market, and by inference would FABTECH provide any push. Several of the respondents took the opportunity to expand on the future market, giving us a better perspective on what we can expect. Keep in mind that most of the respondents are sales oriented, and optimism is a trademark of a good salesman. However, because we did not ask those surveyed for comments about their own company’s situation, and we never do in other surveys of this group, we believe we got an “unbiased” response. Besides, they know that we report consensus opinions so that they are encouraged to think about the market in total not just for their company.

First, none of the respondents project a sales decline in 4th Quarter sales. “Bottoming-out” and “bumpy” were terms used to describe the market. A majority (75%) expects a slight increase in sales over the previous quarter and several were cautiously optimistic that if certain user industries recover as expected they could be the growth drivers. Only 25% expected more of the same (flat) in terms of sales, citing a large inventory of unsold used, virtually new equipment and excess capacity in the job shop industry. These two factors were common to most of the respondents, even those anticipating growth in the last quarter.

Those commenting on early 2010 market growth cited these reasons for the projections for slow or mixed growth for the coming months. Responses suggest that all believe that the recession in the fabricating equipment market has bottomed out and that the market for laser cutters should begin to strengthen by the end of the 1st Quarter of 2010.

Because we didn’t ask for comments on 2010—which will be the subject of our annual economic survey conducted in November—their comments on prospects for the coming year were “off-the-record:” We sensed that the industry suppliers are well aware that the projection for manufacturing in the U.S. is for a slow recovery in 2010, and they are not about to counter this attitude at this time.

We think that the late date for FABTECH (mid-November) will be a good time for these companies to get a handle on their first half of 2010 prospects. Veteran show-goers know that there are few surprises at trade shows. Sales announced at the shows have usually been setup in advance, and the days of a prospect with a bulging wallet, walking the show floor looking for a place to spend it are long gone.

We will always relish the anecdote about the father/son team attending a machine tool trade show making a buying decision for a fully automated laser cutting system, which was held up as the father asked the son if buying two wouldn’t be a better idea. True story; it did happen about five years ago, not here in the U.S. And the clincher—they did buy two and paid cash. Oh, for those good old days.

Generally our survey suggests that FABTECH won’t provide the big bump to close out 2009; instead the show is seen as a launching site for early 2010 orders. Check my Blog (www.industrial-lasers.com/blogs/dabbling/index.html) the Tuesday after the show to get a “from the show floor” analysis of FABTECH’s success.

David A. Belforte
[email protected]

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