Global Automation Index fell in Q4 2011

The global Automation Index fell to 204 in Q4 2011, from 208 in Q3. The decline was the first for the global index since Q1 2010 and the steepest drop since Q1 2010. The decline is the result of a sizeable drop in Asia and anemic growth in the European index. The American Index grew, but these gains were not enough to offset the declines in the other regions. Despite the discouraging news in the short term, the charts on the left show that the global index is at its second highest point since 2008 - only eclipsed by last quarter. This is very encouraging because automation markets are back to - or slightly above - pre-recession levels despite persistent fragility in the overall economy. This shows that manufacturing is playing an integral role in the global economic recovery and gives reason to be optimistic for increasing growth in automation markets as the global economy continues to recover.
Softening demand - both domestic and foreign - is stifling growth in Asia and Europe continues to struggle with its persistent sovereign debt crisis. Much of the worry in Europe is the result of uncertainty, which is part of the reason that the index has been so up and down in recent quarters. When the fate of Greece is decided - one way or the other - ARC expects this volatility will lessen as the EU's decision will set a precedent and provide a framework for the other distressed economies in Europe. This will provide a clearer picture of how the debt crisis will be resolved, which will assuage the fears of many consumers, investors, and automation suppliers alike.