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SEC Response Letter

 December 7, 2005

 Mail Stop 7010

 Securities and Exchange Commission

 450 Fifth Street, N.W.

 Washington, D.C. 20549

 Attention: Rufus Decker, Accounting Branch Chief

Re:
NATCO Group Inc. – File No. 1-15603

 Form 10-K/A for the Fiscal Year Ended December 31, 2004;

 Forms 10-Q for the Quarters Ended March 31 and
June 30, 2005

 Ladies and Gentlemen:

 On behalf of NATCO Group Inc., we enclose a memorandum in
response to the comments of the Securities and Exchange Commission in its letter of November 22, 2005. In submitting its response, the Company acknowledges that:

•

The Company is responsible for the adequacy and accuracy of the disclosure in its filings under the Securities Exchange Act of 1934;

•

Staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to such filings; and

•

The Company may not assert Staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.

 If you have any questions regarding these comments, please
direct them to Richard W. FitzGerald, Senior Vice President and Chief Financial Officer (713-685-8082) or, in his absence, Katherine Ellis, Senior Vice President & General Counsel (713-685-6183).

 Sincerely,

 /s/ John U. Clarke

 /s/ Richard W. FitzGerald

John U. Clarke

Richard W. FitzGerald

Chairman & Chief Executive Officer

Senior Vice President & Chief

    Financial Officer

 Enclosures

Brookhollow Central III

Telephone: (713) 683-9292

2950 North Loop West, 7th Floor

Facsimile: (713) 812-6654

Houston, Texas 77092

 US Securities & Exchange Commission

 December 7, 2005

 Page 2 of 2

cc:
Scott Watkinson, Staff Accountant

 Stop 7010

 Jeanne Baker, Assistant Chief Accountant

 Stop 7010

 Bill Swanstrom

 Locke, Liddell &
Sapp

 Marc Watts

 Locke, Liddell & Sapp

 Eric Johnson

 Locke, Liddell & Sapp

 Al Kekish

 KPMG LLP

RE:
Form 10-K/A for the Fiscal Year Ended December 31, 2004

 Forms 10-Q for the Quarters Ended March 31 and June 30, 2005

 File No. 1-15603

 December 7, 2005

 Memorandum of NATCO Group Inc. in Response to Comments of

The Securities and Exchange Commission dated November 22, 2005

 Form 10-K/A for the Year Ended December 31, 2004

 Financial Statements, page 46

 Consolidated Statements of Operations, page 47

1.
We have reviewed your response to comment two. We note that you recognize your parts and installation services on an as delivered, as performed basis. However, with regard to your
disclosure obligations under Rule 5-03.1 of Regulation S-X, we believe that you are required to separately disclose your revenues related to parts and installation service. In this regard we note, as indicated in your response to prior comment six,
that you sell parts on a stand-alone basis. Notwithstanding the fact that you have not historically separately tracked parts and service revenues, it appears that you have the ability to do so. Therefore, we believe that you should separately
present parts and service revenues in future filings.

 Response: The Company does sell parts on a stand-alone basis and these revenues are included in the “Traditional/Standard/Used Equipment” category in note 10 of our third quarter Form 10-Q segment disclosure. Also included
in that line item is commingled product and service activity where parts and the related repair and installation labor are quoted, ordered and billed on a single invoice. We do not identify, in our primary reporting systems, the separation of labor,
materials and overhead for revenue or billing purposes related to this commingled activity. In order to accomplish this separation of products and services, information must be obtained from secondary sources such as our bidding and invoicing
systems.

 The Company will separately report product and
service revenues and related cost of goods sold as required by Rule 5-03.1 of Regulation S-X in future filings. We will use information from the various reporting and tracking systems in order to minimize allocations. Our proposed revised disclosure
for the three months and nine months ended 2005 and 2004 is shown below.

 NATCO GROUP INC. AND SUBSIDIARIES

 UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

 (in thousands, except per share data)

 Three Months Ended

 September 30,

 Nine Months Ended

 September 30,

2005

2004

2005

2004

 Revenues:

 Products

$
83,368

$
70,284

$
231,016

$
188,282

 Services

19,032

14,029

54,688

41,360

102,400

84,313

285,704

229,642

 Cost of Goods Sold:

 Products

66,983

57,651

187,300

153,007

 Services

10,568

7,702

29,872

23,230

77,551

65,353

217,172

176,237

 Gross profit

$
24,849

$
18,960

$
68,532

$
53,405

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2.
It is unclear to us why allocation of the direct costs of parts sold and the labor expended in their installation requires a significant degree of subjective cost assumptions.
Separating the amount relieved from inventory from the cost of labor expensed on installation does not appear to us to require subjective allocation. Please provide us with additional information to help us understand why allocations are necessary.

 Response: Material and labor costs are
not separately identified in our primary reporting systems for the majority of the cost of goods sold. These details are only available in other secondary systems such as project costing, inventory, purchasing and labor management. Our existing
reporting from these systems will need to be modified to provide this information. Also, there are other direct costs not easily identified in our systems that are incurred in support of both product and service activities that require a level of
allocation.

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