Further, while we are hopeful that, in aggregate, we are seeing a bottoming in activity levels, there is no convincing evidence that our North American markets will rebound meaningfully before year-end. In addition, European, Asian and, to a lesser extent, South American markets are beginning to decline in lagged response to the North American weakness.

200

In the first quarter, the worldwide electrical and hydraulics markets were stronger than we had expected. In addition, the NAFTA heavy-duty truck market started the year with considerably stronger growth in both production and orders than we had anticipated.

103