Our latest proprietary survey confirms the improvement seen in macro data,though with activity levels down from pre-pandemic peaks, with an outlook that suggests a shape of recovery that is more similar to '14/'15 than the long tailed,more material cyclical recovery seen in '08/'09. Most interesting items include a pickup in expectations for average declines of >15%, with customer capex down 10%+, while, longer term, they believe customers had not entered this period having under-spent on equipment, and noted the tax changes catalyzed virtually nothing for their businesses, which go against the notion of some pent up demand for US manufacturing capacity. On end-markets, there remain notable downticks in oil/gas and auto, while food/beverage is stable, but not accelerating. Turning to recovery, most see 5-10% growth for the next 10 months, about in line with the recovery projected coming out of the '15 lull in activity. In addition, when it comes to the “themes” in this sector, most expect more activity in US capex as a result of the pandemic, but this would be hurt in the event the corporate tax rate goes up in a “Blue Wave”. On software, most view focused software vendors as better positioned than automation hardware providers to exploit this opportunity. From a US stock perspective, we remain UW on ROK (expectations remain too optimistic) and OW on EMR (attractive valuation, more stable portfolio and defendable margins on ~$1 B+ of cost out). In Europe, we prefer Siemens OW over ABB (UW). Industrial software represents close to 30% of Siemens DI sales while the exposure is very limited at ABB. We also ABB's growth in 2021 to e held back by fossil exposure and late cycle capex markets.

J.P. Morgan/CSIA automation survey. This note summarizes our latest proprietary survey of control system integrators, where we received ~207 responses. System integrators are third-party firms focusing on delivering technically advanced capital projects, a proxy for upward of 70% of sales for automation suppliers. Responses are slanted toward North America, similar to the overall SI industry, but with some global representation as well. We are pleased to continue our partnership with CSIA (Control System Integrators Association), the leading professional association representing the industry.Auto & Tire, while book