Pumps and Pumping Equipment

SIC 3561

Companies in this industry

Industry report:

This category covers firms primarily engaged in manufacturing pumps and related equipment for general industrial, commercial, or household use, including domestic water and sump pump manufacturers. It does not cover manufacturers of fluid power pumps or motors (SIC 3594: Fluid Power Pumps & Motors,) manufacturers of measuring and dispensing pumps for gasoline service stations (SIC 3586: Measuring and Dispensing Pumps), non-laboratory-use vacuum pumps (SIC 3563: Air and Gas Compressors), laboratory vacuum pumps (SIC 3821: Laboratory Apparatus and Furniture), or motor vehicle pumps (SIC 3714: Motor Vehicle Parts and Accessories).

Industry Snapshot

Because pumps are the second-most common machines used by all industries behind electric motors, the health of the pump manufacturing industry depends to a great extent on the general health of U.S. industry, particularly petrochemical and the pulp and paper. However, steel making, electric power generation, sewage system construction, general housing and commercial construction, and oil and gas wells, fields, and pipelines also depend on special purpose pumps.

Such pumps, which can be abrasive inherently, often wear quickly because they frequently move materials contaminated with abrasives in challenging climates and environments. This requires frequent replacement or repair, making the replacement parts segment of the industry particularly important. The U.S. pump industry was considered mature, and the bulk of growth was expected to be tied to replacement purchases. The value of shipments in 2008 totaled $12.1 billion, up slightly from the 2007 total of $12 billion.

Organization and Structure

Some 613 establishments manufactured pumps and pump equipment in 1977, an increase of 10 percent over the 1972 census figures. However, this number dropped to 528 by 1987 and an administrative redistribution of SIC codes left the industry with only 405 establishments at the end of 1987. The other 123 establishments were reclassified into SIC 3594: Fluid Power Pumps and Motors. The 1990s saw a small rally in the industry, though, and 487 establishments existed by 2002. As of 2005, the number increased further to 602 establishments. The global economic recession at the end of the first decade of the 2000s, however, resulted in a decrease in number of establishments to 536.
At $9 billion, pumps and pumping equipment comprised the largest product category in terms of shipments. Industrial pumps and parts was the next largest segment with more than $2.5 billion in shipments, and domestic water and sump pumps was third with approximately $500 million in goods shipped.

Historically, manufacturing in this industry has been heavily concentrated. In 1977 more than half of the industry's employees worked in the four largest facilities, and 79 percent of all facilities had less than 100 employees. By 1987 this had changed slightly with 75 percent of all facilities employing fewer than 100, but diffusion was more evident in the large firms. In 1987, the U.S. Census Bureau reported that the largest 41 firms employed 52.6 percent of all workers. In 1997, about half of the industry's establishments had at least 20 employees, and 20 percent had at least 100 employees. As of 2007, most establishments in this category were small, with 33 percent reporting fewer than 10 employees. About 20 percent of businesses had between 10 and 24 employees and approximately 13 percent had between 25 and 49 employees.

Background and Development

The world's first pump was probably the force or air pump built by Ktesibios of Alexandria about 270 B.C. He used a cylinder and plunger arrangement to pump air through pipes of various lengths, creating the first water organ. The water was used to maintain a steady air pressure in the system. Simple pumps quickly became common for domestic use and as fire extinguishers. Roman ruins yield examples of pumps used for fire control and for lifting water in wells. The famed Roman aqueducts were probably not fed with pumps, but used waterwheels to lift water from reservoirs directly to the piping system.

A major advance in pumping technology occurred in 1698 when a British patent was issued to Thomas Savery for a steam-powered pump for use in coal mines. The device was later adapted to provide water to some country houses. This pump was effectively replaced by the Newcomen engine, patented in 1712, which placed the steam boilers and piston assembly at the top of the mineshaft instead of at the bottom. The concept introduced the working, or balance, beam to transfer power to the pump mechanism in the mine that continued to be used in the first decade of the 2000s.

Many uses were discovered for the powered pump during the Industrial Revolution, including industrial processing and domestic distribution of water. However, in the twentieth century, the industry introduced a refinement by way of electrification. The first U.S. factory to replace its central steam plant and its maze-like system of pulleys and belts with electric motors was a cotton mill in 1894. All new factories then used the new technology.

Economic and technological expansion in the 1960s stimulated pump production and encouraged the adoption of new manufacturing techniques. The industry adopted specially designed milling machines and combination machines that could perform milling, radial drilling, and facing (smoothing) in one operation. Automatic tool changing devices, operated by numerical control tape programs, increased production efficiency.

In general, the pump industry manufactures large specialty items to meet a client's specific needs. To accommodate such a need for flexibility, the industry quickly adopted numerically controlled machine tools and computer numerical controls. This shifted the center of production control to the firm's engineering department and away from the craftsmen on the shop floor. Computer assisted drafting and modeling programs have further increased design efficiency.

The general industrial slowdown of the 1980s hit the pump industry hard. Major clients, such as the nuclear power industry, the oil well and pipeline industry, and the construction industry, cut back orders for new equipment and idled existing components. A strong U.S. dollar made U.S. products uncompetitive in foreign markets.

Changes began to occur by 1988 as a weakening dollar increased exports. In addition, a general pickup in the manufacturing climate sparked new domestic orders in almost all sectors. The industry continued to modernize production by consolidating facilities and adopting sophisticated CAD/CAM systems along with metalworking and casting technologies. New materials and designs were explored to extend the life of components in corrosive environments and to increase reliability.

The most important markets served by the pump industry have been the steel, oil, construction, and chemical industries. Steel mills and blast furnaces used industrial pumps to move liquid fuels and water for coolant. As the steel industry moved away from open-hearth furnaces to oxygen and electric furnaces and to continuous casting instead of slabbing mills, larger, more powerful pumps to provide higher volumes of coolant water were necessary. This led to the development of higher-output centrifugal pumps.

The oil well and pipeline industries also purchased a large number of pumps. Although demand in this sector dropped dramatically in the 1960s, it recovered. The industry bought reciprocal pumps for mud circulation, submersible centrifugal units for lifting crude oil, and standard centrifugal pumps to maintain pressure with water flooding. Pipelines required high-horsepower centrifugal pumps. In the 1960s, the average pipeline diameter was enlarged 33 percent, requiring much larger pumps to move the higher volumes of petroleum products.

The construction industry used centrifugal pumps and trash pumps, which could accommodate up to 25 percent small solids in the pumped liquid. New sewage plant construction that would accommodate increasingly stringent environmental regulations and infrastructure replacement and upgrading were expected to increase the demand for pumps through the end of the twentieth century and into the first decade of the 2000s.

The chemical industry also made significant use of pumps. Pumps for this market used special materials like fiberglass, plastics, and stainless steel to accommodate salt solutions, acids, and chlorine.

The pumps and pumping equipment industry remained closely linked to the state of U.S. industry in general. Focus in the first decade of the 2000s continued to be on producing technologically advanced, highly customized pumps and equipment. Industry shipments in this category were $12.1 billion in 2008. The states with the largest numbers of establishments were California (140), Texas (125), and Florida (74).

Current Conditions

According to industry statistics, in 2010 there were an estimated 1,317 firms primarily engaged in manufacturing pumps and related equipment for general industrial, commercial, or household use, including domestic water and sump pump manufacturers with an estimated value of $20 billion and industry-wide employment of 36,982 workers. On average, each establishment employed 29 workers generating about $19.4 million in revenues. States with the highest concentration were California (10.8 percent), Texas (12.4 percent), Florida (6.7 percent), Ohio (5.5 percent) and Pennsylvania (4.7 percent).

There were an estimated 847 manufacturers of pumps and pumping equipment in 2010 comprising 64.3 percent of market share with product shipments totaling more than $15.1 billion and a workforce of 25,289 employees. In 2010 there were roughly 194 manufacturers producing industrial pumps and parts with product shipments that reached nearly $4.2 billion. Another 1,317 manufacturers produced domestic water or sump pumps in the industry with a value of $440.8 million. Also adding to the industry total in 2010 were 71 oil well and field pumps manufacturers with revenues of $144.1 million, and 28 manufacturers of pump jacks and other pumping equipment that shipped $74.1 million in products. There were 45 manufacturers of pump cylinders that added $66.4 million into the industry total.

Demand for pumps in the oil well and pipeline industries was projected to stabilize in 2010 while projects that had been postponed a year earlier were being continued. Also in 2010, large infrastructure projects, particularly in China and India, were expected to boost pump demand in the power generation sector. Market conditions for pumps began to rebound from a major decline in 2009, particularly within the chemical and distribution sectors.

In the January 2011 edition of Pump & Systems Michelle Segrest projected that "Following a couple years of disciplined inventory maintenance, competitive bidding, strategic acquisitions and other conservative trends, companies prepare for a long-awaited upturn." China, India, and the Middle East were expected to spur growth, especially within the oil, gas, and mining sectors. Industrial municipal projects looked promising, in spite of delays caused by lack of funding. The industrial markets were predicted to result in double-digit growth for some pump and pump equipment manufacturers in 2011.

Industry Leaders

In the middle of the first decade of the 2000s, the industry leader was FE Petro Inc. of McFarland, Wisconsin, with sales of approximately $89 billion. Goulds Pumps of Seneca Falls, New York, with 2007 sales of just under $502 million and 4,500 employees, and Beach-Russ Company of Brooklyn, New York, with $377 million in sales, were other leaders in the industry.

FE Petro, a subsidiary of Franklin Electric Co., Inc., became Franklin Fueling Systems, Inc., in 2004 following the acquisition of EBW, Inc., and APT, Inc. Franklin Fueling Systems, Inc., based in Madison, Wisconsin, reported worldwide net sales totaling $121.2 million in 2009, which accounted for about 20 percent of Franklin Electric's net sales of $626 million in 2009. Franklin posted $713.8 million in revenues for 2010, and had 3,470 employees. Goulds Pumps, a subsidiary of ITT Fluid Technology, reported revenues of $484.5 million and 4,500 employees in 2010.

Workforce

Historically, the industrial machinery group has used a high proportion of skilled trades, with about 30 percent of all production workers compared to the 26 percent proportion in all manufacturing. Metal working craftsmen and machinists have been about three times more common in this industry than in manufacturing as a whole, while laborers were half as common. The industry also tends to employ a high proportion of non-production workers, perhaps indicative of its reliance on mechanical engineers.

According to the U.S. Census Bureau, companies that manufactured pumps and pumping equipment employed 36,436 people earning a payroll of just under $1.86 billion in 2007. Nearly half of the workforce was engaged in production, and 40 percent of those employed in this industry worked for small companies of less than five people.

America and the World

Pumps and pumping equipment were manufactured to international standards, allowing U.S. manufacturers to compete in the international market. These same standards, however, also made the United States vulnerable to foreign competition, particularly with regard to price and quality. During the early 1980s, a strong U.S. dollar made such competition particularly difficult, undermining an already weak industrial climate in U.S. manufacturing. As a result, the U.S. trade deficit quadrupled between 1982 and 1984, reaching $145 billion. The effect on the pump manufacturing industry was not immediately apparent. Although the industry reported a trade surplus in 1985, by 1987 there was a $1.9 billion deficit. The drop of the value of the U.S. dollar in 1985 provided new impetus for the pump industry. By 1987, the average export price expressed in foreign currency of pumps and other machinery had fallen 23.1 percent. By 1990, although domestic prices increased an average of 5 percent annually, the foreign currency price of pumps and components dropped more than 11 percent. This made U.S. operations more profitable, increased export volumes, and discouraged imports. It also encouraged foreign companies to establish manufacturing and assembly facilities in the United States.

By 1990, exports approached $1.1 billion while imports exceeded $700 million. By mid-decade, Purchasing magazine estimated foreign purchases to be 45 percent of overall demand. This share was expected to decline as companies opened overseas manufacturing operations. Major markets for U.S. products included Canada, Mexico, the United Kingdom, Saudi Arabia, West Germany, Venezuela, and Japan. The top importers included Japan, West Germany, Canada, and the United Kingdom. Emerging markets included Latin America, Africa, the Middle East, and Asia (especially China).

Goulds Pumps, an industry leader, was particularly focused on international sales. By 1995, 45 percent of the company's revenues were generated overseas, with 29 percent of its total sales coming from Europe. The company expected most of its future growth to be concentrated in the Asia-Pacific region. China appeared to be an especially appealing target. In 1985 Bingham-Willamette (based in Portland, Oregon) sold China six pumps valued at $600,000 but the expected increase to 200 pumps per year was supplanted with a decline over the next two years. In 1998, Goulds signed a joint-venture agreement with Nanjing Deep Well Company to produce 600 pump units for four petrochemical plants in a deal worth several million dollars at each plant.

In 2008, imports totaled $3.5 billion from 97 countries and exports reached $3.7 billion from 179 countries.

Research and Technology

Most pumps are made to a client's specific requirements for use in complex applications where the failure of the pump could be disastrous. Consequently, manufacturing innovation stressed flexibility and reliability. Major innovations included the adoption of numerical and computer control manufacturing systems and the reliance on engineering expertise, assisted by computer modeling software, to custom design components for short run production. New corrosion resistant materials have been developed and refinements to old processes have been adopted. Specially designed metal-forming machines were created for the industry, including combination milling, radial drilling and facing machines, variable setting grinders which automatically form tapered shafts, and automatic tool changing devices controlled by NC tapes or computer software. Foundry operations for production of pump casings and core-making advanced with rapid-cycle machinery, synchronous fabricating machinery, and a no-bake molding process using a resin binder and catalyst. Closer tolerances were achieved in components by replacing wooden molds and cores with ceramic.

Demands for higher-efficiency pumps meant an industry shift from fixed displacement to variable displacement pumps because they do not waste energy by venting excess pumped material through a relief valve. A variable displacement pump adjusts its own flow rate to match demand.

Ongoing research includes noise and leakage reduction, increased efficiency, corrosion-resistance, and development of oil-free and self-lubricating models.

© COPYRIGHT 2018 The Gale Group, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. For permission to reuse this article, contact the Copyright Clearance Center.

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