Allied Motion Technologies Inc.Englewood, CO, United States (NASDAQ (CM): AMOT)

Durable Goods Production Declines - Industrial production of durable consumer goods, a demand indicator for motors, generators, pumps, and compressors, fell 4 percent in the first three months of 2008 compared to the previous year. Production of auto products fell 5.3 percent, and 4 percent for household appliances. One bright spot was industrial equipment, which increased 3.3 percent. Many auto products, appliances, and some industrial equipment contain motors, generators, pumps and/or compressors.

Exports Mostly Weak, European Demand Growing - US exports of compressors, motors, and generators were slow in early 2008, but much stronger for pumps. Air and gas compressors exports fell over 3 percent, while motors and generators declined 0.2 percent in the first two months of 2008 compared to a year earlier; however, pump and pumping equipment exports increased almost 20 percent. In some European markets, US exports of compressors, motors, and generators increased markedly. For example, compressor exports to Italy increased 100 percent; motors and generators 46.2 percent; and pumps 37.7 percent.

Prices Driven Up by Raw Material Costs - Prices for motors and generators, and pumps and compressors rose modestly in March 2008 compared to a year earlier. Motor and generator prices grew almost 4 percent, while pump and compressor prices gained over 5 percent. Prices, however, haven't kept pace with rising raw materials costs. Steel prices increased 8.5 percent in March 2008 compared to a year earlier; copper ore prices grew 23.5 percent, and copper and brass mill shape prices rose 22 percent. The disparity between raw material costs and end-product prices may indicate that producers of pumps, motors, generators, and compressors aren't passing their rising costs to customers to remain competitive.