Chinese Slowdown Impacts Low Voltage Generators Market

Since the end of 2011, China has been suffering through a sizeable economic slowdown, and the low voltage generators market is feeling the effects. When compared to the rapid growth the country experienced over the past several years, the projected 2012 GDP growth rate for China has been revised downward. According to a recently released report on The World Market for Low Voltage Generators from IMS Research, the Chinese market for low voltage generators is forecast to decline in 2012 and only grow at average annual rate of 3.8 percent through 2016.
The slowdown was first evident in small and medium sized manufacturers in South and East China. Many of these manufacturers reported no new orders during the second half of last year. Data from the first quarter of 2012 was also much more anemic than previously anticipated. The trade figures were particularly worrisome, as both the export and import growth rates were the weakest since the fall of 2009.
According to IMS Research Analyst Greg Johnson, "China accounts for nearly 50 percent of the total Asia Pacific revenues and 20 percent of the global market. Therefore, any negative shift in the Chinese market will have a substantial impact on the low voltage generators market globally." While China has a significant domestic market for low voltage generators, their export market is nearly as large. Much of the export demand for China's low voltage generators comes from the EMEA region, which continues to feel the effects of the Eurozone debt crisis. As a result, overall demand for Chinese low voltage generator exports is down.
An examination of certain industry sectors in China sheds further light on the situation. The marine industry in China is predicted to be one of the hardest hit by the slowdown. It is estimated that low voltage generator sales into this sector will decline by more than 15 percent in 2012. Growth in the commercial building industry sector was previously driven by the prosperous period the commercial real estate market witnessed in China over the last 10 years. However, more recently the Chinese commercial buildings market has slowed considerably from those levels, which has had a negative impact on sales of low voltage generators used in the sector in 2012. This sector is expected to stabilize in 2013 due to ongoing demand from hospitals, smaller medical clinics and shopping malls.
Recent economic data suggest that China's deceleration has ended, and overall, IMS Research believes China's economy should be able to achieve a soft landing in 2012 and return to more favorable growth in 2013 and beyond. As a result, the market for low voltage generators is expected to see moderate growth through 2016.