IMS says industrial automation electronics equipment market to exceed expectations in 2010
A strong first quarter performance is predicted for the industrial automation electronics equipment market, after a revenue decline of more than 14% in 2009. The second half of 2009 showed substantial quarter-on-quarter growth for automation specialists.
Results from a new service published by IMS Research (Wellingborough, UK) indicate a strong first quarter performance for the industrial automation electronics equipment market in 2010, after a revenue decline of more than 14% in 2009. The second half of 2009 showed substantial quarter-on-quarter growth for automation specialists, thus beginning a gradual recovery for the market.
In spite of general negative sentiment among many vendors in this space, IMS Research predicts strong growth for most automation equipment in 2010 and 2011. First quarter 2010 growth will likely have been 25% over that of first quarter 2009, during which all regional markets experienced the highest declines. Robust order books developed through both restocking efforts and new orders are expected to lead to a similarly strong second quarter in 2010. Based on a healthy anticipated first half of 2010, even a flat second half will result in close to double-digit revenue growth for most product areas.
Adrian Lloyd, IMS Research Executive Vice President, a co-author of this report, said “This is the first time we’ve consolidated top-level findings from our entire automation portfolio into a single report. It’s quite astounding to see the size of collective revenues accounted for by this market. Not only have we consolidated key data from our own primary research, but also we have compared the results against indices generated from aggregates of quarterly filings of major, publicly-owned industrial electronic vendors. The two sets of data correlate very well, and have generated very interesting findings.”
After several years of rapid expansion accompanied by double-digit growth rates, the motors and motor controls markets were battered by the economic downturn. However, these markets are poised for a substantial recovery in 2010, with a return to double-digit growth in areas such as AC induction motors, DC brushless motors, motion control equipment, and AC & DC drives projected to help lift overall market growth to more than 8% in 2010.
Automation equipment markets, such as PLCs, IPCs, and I/O modules rely heavily on machinery production growth, unlike the motors and motor controls market, which also benefits from a large retrofit business. Following an unprecedented contraction of nearly 20% during 2009, IMS Research projects machinery production will enjoy moderate growth in 2010, providing the platform for automation equipment revenues to grow by 7.6% during the same period. The global automation equipment market was estimated to be worth $40.9 billion in 2009, nearly 55% of the total industrial automation electronics equipment market.
Although most product markets will experience positive growth in 2010, project-based equipment markets are anticipated to recover more slowly than the other equipment markets. Equipment dependent on Greenfield and Brownfield projects tend to have longer lead-times, and therefore lag the general economy. Most project-based business equipment, such as medium voltage motors and drives, and DCS enjoyed growth in 2009 while all other equipment markets contracted. Thus, in effect, the impact of the recent recession is projected to be felt more profoundly during 2010 in these areas.
Additional findings of the report include:
· During the economic downturn the market for industrial automation electronics equipment was estimated to have declined 14.3% in terms of revenues, from $87.4 billion in 2008 to $74.9 billion in 2009, a decrease of $12.5 billion.
· The low voltage AC and DC drives market, estimated to be worth $8.6 billion in 2009, managed to outperform the low voltage induction motors market, thanks in part to the energy efficiency benefits that drives provide through retrofitting.
· The market for PLCs and I/O modules are tied closely to new machinery and, as a result, experienced significant declines during 2009; however both are predicted to see double digit growth in 2010.
· Sales in Asia Pacific were buffered by China’s GDP, which remained positive during 2009. Following the region’s strong early recovery from the downturn, it is predicted to grow by 9.6% in 2010, and is forecast to become the largest regional market for industrial automation electronics equipment by 2011.
An emphasis in this study has been given to the structure of the industrial automation electronics equipment market. Market share estimates based on 2008 revenues include revenue for industrial automation electrical hardware only, excluding any additional revenues generated through software and services or by any mechanical solution. Additional estimates for both motors & controls and automation equipment by region were also produced as part of the study.
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