Fluid Power Valves and Hose Fittings

SIC 3492

Companies in this industry

Industry report:

This classification covers establishments primarily engaged in manufacturing hydraulic and pneumatic valves, hose and tube fittings, and hose assemblies for fluid power systems. Establishments primarily engaged in manufacturing fluid power cylinders are classified in SIC 3593: Fluid Power Cylinders and Actuators; those manufacturing fluid power pumps are classified in SIC 3594: Fluid Power Pumps and Motors; and those manufacturing hydraulic intake and exhaust motor vehicle valves are classified in SIC 3592: Carburetors, Pistons, Piston Rings, and Valves.

Industry Snapshot

In the late years of the first decade of the 2000s, the overall manufacturing sector suffered one of the worst economic downturns in decades, as did the U.S. fluid power industry. As the economy worsened, shipment values plummeted, reaching $4.7 billion by 2010.

By 2011, industry participants were hoping for a recovery in the economy as well as the hydraulic and pneumatic valves, hose and tube fittings, and hose assemblies for the fluid power systems industry. There were an estimated 434 establishments engaged in the industry in 2010. Together these firms generated $4.7 billion in revenues and employed 15,803 workers. On average, each establishment employed 38 workers and garnered $15.2 million in revenues. The leading states for the production of fluid power valves and hose fittings that year were Connecticut and Massachusetts.

The largest sector based on shipments was manufacturers of aircraft (hydraulic and pneumatic) control valves, which generated $4.1 billion in revenues. In contrast, the largest sector based on number of establishments was the manufacturing of hose and tube fittings and assemblies, which accounted for about 42 percent of businesses.

Organization and Structure

According to the National Fluid Power Association (NFPA), fluid power is energy that is transmitted and controlled through a pressurized fluid that is either liquid or gas. Fluid power valves regulate the liquid or gas as it moves through valves, hoses, and fittings. The term "fluid power" thus applies to both hydraulics and pneumatics. Hydraulics utilizes liquid, oil, or water under pressure, while pneumatics refers to the use of compressed air. Fluid power is often used in conjunction with other technologies such as sensors, transducers, and microprocessors. Included in the total fluid power market are fluid power valves and fittings, as well as hydraulic and pneumatic pumps, cylinders, rotary actuators, motors, filters, hose accumulators, air preparation accessories, stationary compressors, and other products.

The three large segments of the fluid power industry are mobile hydraulic, industrial hydraulic, and pneumatic. Historically, mobile hydraulic applications have accounted for about 50 percent of fluid power sales while the other two segments each have held about 25 percent of the market. The mobile hydraulic segment (heavy truck, construction equipment, and agricultural machinery), although the largest, is also the most volatile.

The aerospace, construction equipment, heavy truck, agricultural equipment, and machine tool and materials handling industries account for about 75 percent of total fluid power consumption in the United States. The other 25 percent is divided among more than 500 other industries. In 1992, the top five product shares by type in order of dollar value were non-aerospace-type hydraulic and pneumatic fittings and couplings for hose; aerospace-type hydraulic and pneumatic fluid power hose or tube end fittings and assemblies; aerospace-type hydraulic fluid power valves; non-aerospace-type flareless fittings and couplings (including nonmetal fittings) used in fluid power transfer systems; and non-aerospace-type pneumatic directional control valves. The rest of the market was divided into eight other categories by type.

Fluid power valves rely heavily on a number of economic sectors and industries for business inputs. In the first decade of the 2000s, the highest percentage of input was provided by blast furnaces and steel mills at 12.9 percent, followed by wholesale trade materials at 12.7 percent. Manufactured pipe, valves, and pipe-fittings represented 8.8 percent; manufactured goods from iron and steel foundries, 7.4 percent; and screw machine products, 4.8 percent. The remaining input categories were all less than 4 percent.

Background and Development

This industry is characterized by large businesses and labor-intensive processes since most of the establishments engaged in the industry have over 20 employees. During the 1990s, the number of employees per establishment was higher than the average of all manufacturing, as were payroll, hours worked, and wage statistics and shipments per establishment. Shifting from earlier trends, shipments per establishment also were higher than average, but investment per establishment was average.

According to the NFPA, the fluid power industry underwent two periods of sustained growth in the 1980s and 1990s. The average annual growth rate of the industry between 1987 and 1990 was 9.5 percent, and this figure climbed to 11.7 percent from 1993 through 1995. This remarkable growth was due to the expansion of existing markets and new markets, especially robotics and active suspension systems on automobiles that resulted from the introduction of electrohydraulic and electropneumatic technologies. Growth began to wane in the late 1990s, however, as shipments fell from $6.83 billion in 1998 to $6.49 billion in 1999. In 2000, the value of shipments recovered to $6.69 billion. The cost of materials grew to $2.78 billion that year.

The NFPA remained optimistic about future industry growth despite the slowdown in fluid power consumption growth in the late 1990s. Reasons for optimism included a strong and continued global demand for consumer goods and growth in demand for capital equipment in eastern Europe and South America.

Shipments were valued at $6.97 billion in 2005, according to figures from the U.S. Census Bureau, and represented a healthy increase from $5.87 billion in 2002. Much of the growth in demand came from the manufacturing sector, which emerged from its general slump of the early 2000s, and the replacement of older equipment. In addition, companies were able to spend money on expansion for the first time in several years.

Exports played an increasingly important role in the U.S. fluid power industry. In 1989, U.S. fluid power exports were valued at $500 million, but by 2005, this figure had grown to nearly $2.1 billion.

Fluid power imports, however, also rose. In 1989, U.S. imports of fluid power products stood at $350 million, but by 2005, this figure had increased to $3.2 billion. The five top importing countries of U.S. fluid power goods in the mid-2000s were Germany at $770 million, Japan at nearly $552 million, Canada at $491 million, Mexico at $268 million, and the United Kingdom with $263 million. Four of these countries also were the largest exporters of fluid power products to the United States--Canada with $715 million, Mexico with nearly $246 million, Germany with $147 million, and United Kingdom with $120 million.

The National Fluid Power Association (NFPA) calculated the U.S. fluid power market at $10.6 billion in 2003. The hydraulic segment represented $7.8 billion of this total, and the pneumatic segment represented $2.7 billion. The 2005 value of direct exports of U.S.-manufactured fluid power products, according to the NFPA, was nearly $2.1 billion. The U.S. government estimated shipment values for fluid power valves and hose fittings at nearly $6.97 billion in 2005, an increase from nearly $5.87 billion in 2002.

Fluid power imports continued to grow, from $3.2 billion in 2005 to $4.4 billion in 2008. According to figures released by the U.S. Department of Commerce, Germany was the leading importing country of U.S. fluid power goods in 2008 (22 percent), followed by Canada with 16 percent, and Japan with 13 percent. The leading exporters of fluid power products into the United States were Canada with 23 percent, Mexico with 10 percent, and Germany with 9 percent.

Current Conditions

According to the NFPA, imports continued to outpace exports in this industry in the early 2010s. In 2010, total imports in the industry were worth $4.3 billion, whereas exports totaled $3.5 billion. About 19 percent of imports came from Germany, 16 percent from Japan, 12 percent from Canada, 10 percent from China, and 9 percent from Mexico. The remainder was made up by many other countries. In terms of exports, Canada was the number one market for U.S. fluid power valves and hose fittings, accounting for 19 percent of U.S. exports, followed by China and Mexico (each with about 9 percent), Brazil, and Germany (each with about 7 percent).

Other figures from NFPA showed that rotary hydraulic pumps had the highest value of all U.S. imports in the industry, accounting for $768 million in 2010, followed by linear hydraulic actuators ($631.8 million), hydraulic valves ($570.6 million), parts of actuators and motors ($487.8 million), and parts of valves ($377 million). On the export side, hydraulic valves had the most value, with $641.5 million, followed by rotary hydraulic pumps ($440 million), reciprocating hydraulic pumps ($368.7 million), parts of actuators and motors ($317.7 million), and linear hydraulic actuators ($313.7 million).

Industry Leaders

The top companies engaged in the fluid power industry in the early 2010s included ITT Corp., Eaton Corp., SPX Corp., and the Cameron Corp.

ITT Corp. of White Plains, New York, made a wide variety of products and provided service in three divisions: Defense, Fluid, and Motion & Flow. These include pumps, valves, mixers, and other fluid technology products such as Koni shock absorbers and struts for the automotive market. ITT planned to divide its three sectors into separate, publicly traded companies by the end of 2011. ITT Corp. generated $10.9 billion in sales in 2010 with 40,000 employees.

Eaton Corp., formerly Vickers, was founded in 1921 to design and build hydraulic machinery. In 2010 it was a diversified company, with its Fluid Power division, including the Aeroquip and Vickers brands, producing a wide range of products for the fluid power industry, including all pressure ranges of hoses, fittings, adapters, couplings, and other fluid connectors along with motor pumps, valves, and electrohydraulic, hydraulic, and pneumatic cylinders. The company's Fluid Power division produced and serviced 400 products and 34,000 components, including hydraulic and electrohydraulic equipment for global aerospace, marine, and defense markets. Based in Cleveland, Ohio, Eaton had $13.7 billion in 2010 sales for all its divisions and 70,000 employees.

SPX Corp. of Charlotte, North Carolina, nearly doubled its size with the acquisition of General Signal Corporation in 1998. SPX's Flow Technology division produced high-pressure hydraulic pumps, rams, valves, pullers, and other equipment as well as equipment for automotive and industrial markets. In 2010, SPX generated $4.8 billion in sales with 15,500 employees.

The Cameron International Corp. (which was called Cooper Cameron until 2006) of Houston, Texas, produced land and offshore hydraulic control and drilling systems for the oil industry, as well as hydraulic industrial equipment including compressor systems. Products included oil and gas pressure control equipment such as valves, wellheads, chokes, and blowout preventers. It also produced assembled systems for oil and gas drilling, production, and transmission. Cameron's revenues reached $6.1 billion in 2010 with 19,500 employees.

Research and Technology

The three key areas of research in the fluid power industry, according to the NFPA, are higher operating pressures, lower noise levels, and less environmental contamination due to leakage. The industry has always been driven toward higher operating pressures, and this demand was not expected to subside. The noise issue is relatively new and is based on more stringent government noise regulations. The leakage issue applies more to hydraulics than it does to pneumatics, especially hydraulic oil leakage. This issue is being addressed with the increased use of straight thread connectors, a renewed interest in water in hydraulic systems, and more environmentally friendly fluids.

Under continuing pressure from the Environmental Protection Agency (EPA), the fluid power industry is turning toward more environmentally friendly fluids for use in hydraulic systems and products. To be considered environmentally safe, fluids must be readily biodegradable and virtually nontoxic, but many such products, especially vegetable oils, have a deteriorating effect on commonly used urethane seals through hydrolysis. However, Parker Seals Packing developed a high-grade urethane known as P4301A90 that resisted hydrolysis. Thus, environmentally friendly oils such as rapeseed oil can be used in some hydraulic applications. Another problem with the use of vegetable oils in these applications was the propensity for rapid oxidation at high temperatures because oils are not fire resistant. To deal with this problem, Houghton International of Valley Forge, Pennsylvania, has begun marketing a canola oil-based hydraulic fluid called Cosmolubric B-230 that is described as a "vegetable oil derived fire-resistant hydraulic fluid with additives to enhance corrosion protection, metal passivation, and oxidative inhibition."

Other trends included the use of exotic materials, miniaturized pneumatic valves, and solid-state pressure switches. In 1999, Parker Hannifin, for instance, introduced corrosion-free compression tube fittings made from a titanium alloy. The company also produces compression tube fittings made of Hastelloy, a nickel-molybdenum alloy, as well as Alloy 400, a nickel-copper alloy.

Kenneth Korane, managing editor of Machine Design, predicted a growing demand for miniaturized pneumatic valves. "The world of pneumatics is getting smaller. A growing need for economical systems that are durable, flexible, and fast is feeding demand for downsized components," wrote Korane. Smaller valves are easier to install, take up less space, and answer the growing need for valves that can be mounted on moving actuators and end effectors, according to Frank Latino, senior product engineer for the Festo Company. Weight is also a growing issue. "More and more, pneumatic valves are used in portable equipment where weight and size become critical," according to Jim Crain, vice-president of Cincinnati-based Clippard Instrument Laboratory. "Small valves are put into everything from clinical chemistry instruments to medical equipment itself," concurred Les Greenberg, business unit manager for Vector Engineering.

Solid-state pressure switches used in fluid power circuits provide fast and precise operations and a longer cycle life than conventional electromechanical switches, according to Richard Schneider, an editor at Hydraulics & Pneumatics: "In addition, microprocessor circuitry makes possible performance features which extend the basic capabilities of pressure switches and allow solid-state models to handle difficult applications." Schneider believed that the integration of solid-state technology into these applications represented significant technological advance for the industry.

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