Unidentified Analyst: That’s great. Thanks, Chip.
Chip Blankenship: You’re welcome.
Operator: The next question is from Noah Poponak with Goldman Sachs. Your line is open.
Noah Poponak: Hello, everyone.
Chip Blankenship: Good afternoon, Noah.
Noah Poponak: Hi, all. Just following up on the defense business. You mentioned the guided weapons in the aftermarket. What rate of decline did those end up having for full year 2022? And what are you assuming for those in the 2023 assumption that the defense business grows?
Mark Hartman: Yes. So the rate of decline on the defense OE side for the year was about 17% and defense aftermarket was about 12%, two different reasons there as we’ve discussed. There is still a little softness on the guided weapons side, just on the JDAMs, a little bit more softness yet in 2023 compared to 2022. But otherwise, as Chip was just saying, the demand is strong. It’s really a matter of us being able to get that past due down to be able to show growth there.
Noah Poponak: Okay. What are the drivers behind the lumpy to the upside growth rate at industrial in the fourth quarter versus the trailing several quarters and how you’re guiding it for next year?
Mark Hartman: Yes. So we have strong growth across all of our end markets and across all of our businesses on the industrial side in the fourth quarter. And really, the €“ other than the China natural gas business, which remains at these depressed levels. And so it was a strong fourth quarter on the Industrial side. And then even on top of that, we had the headwind of the FX, which would even had industrial looking even stronger on the top line. And so the demand has been there. We’ve been, I think, saying that for a while now across all of our business, but specifically with industrial, we continue to call it out, the demand for power generation across Asia power demand, replacing coal power plants here in North America, backup data €“ or backup power for data centers has been strong and continues to be strong.
The marine side, we’ve talked about the continuing strength of both the OEM build rate has been at elevated levels and maintains at that level. The marine aftermarket side, we’ve talked historically that it was very depressed during the pandemic that there was going to be this bullwhip effect of everyone needing to restock their shelves with spare parts and then also do repairs when the vessel is import, getting loaded and unloaded and we continue to see that and strength there in the fourth quarter. And then the oil and gas side with commodity prices, kind of at the levels that they are, both the utilization of the equipment that’s out there and then even driving some new investment has really been what drove the industrial side. I would say it’s just a continuation of what we saw on the demand side as we continued throughout the year.
Chip Blankenship: So Mark covered the external demand side nicely there. And then additionally, we had strong performance from our Woodward L’Orange facilities in Germany, serving those marine and industrial markets. And we had some outages from chip shortages and some other components that came in and we redesigned some circuit boards to accept different types of components that we could find availability on. And so we had a strong finish there to €“ with lines that were wetted and ready to receive those components in September.
Operator: The next question is from Chris Glynn with Oppenheimer. Your line is open.
Chris Glynn: Thanks. I think my follow-ups have been asked, but I just wanted to clarify, did I hear a 5% FX headwinds, which you have baked in if the currency stays at euro parity?
Mark Hartman: On the industrial side, yes.
Chris Glynn: Okay, thank you.
Chip Blankenship: You’re welcome.
Operator: The next question is from Noah Poponak with Goldman Sachs. Your line is open.
Noah Poponak: Hi. I think my phone might have pick up there.
Chip Blankenship: No problem.
