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Poised to grow stronger in second half

Industrial Automation Equipment
Industrial Automation Equipment

The market for industrial automation equipment (IAE) is set to grow 6.2 percent this year to approximately $170 billion, helped in part by the recovery of global manufacturing in the first quarter, according to a report entitled "The World Market for Industrial Automation Equipment" from IMS Research, now part of IHS.
The more optimistic outlook for 2013 contrasts with the anemic market conditions of last year that had been aggravated by the interconnected nature of a globally linked space, said Jenalea Howell, research manager for the Industrial Automation service at IHS.
"The interdependence of the world's industrial markets came to the fore during 2012 and made its presence felt as weak demand in some regions hit the exports of others, causing revenue from industrial automation equipment (IAE) to grow only 3.7 percent," noted Howell. In addition, overcapacity in several industrial markets, following two years of strong growth in China, led shipments to fall by more than 2 percent.

Conditions all around have now improved, however. For one, leading indicators-including machinery orders and manufacturing activity-point to increasing demand for industrial products during the next six months. Moreover, progress has been observed in the markets of China, Europe and the United States in the first half this year, fueling confidence that the IAE space is headed toward renewed vigor.

In China, manufacturing indices indicate that a slow and steady improvement that began in September 2012 has continued through the first five months of 2013. China is also reporting that inventory replenishment has started to occur in equipment markets of extremely low levels last year. Meanwhile in Europe, increases in German machine-tool orders also point toward also bolstered demand that could redound to the IAE market.

Signs of economic health are likewise springing up in the United States, where greater growth stemming from a variety of factors--ranging from rising natural gas exploration and production, to strengthening housing markets, to rising exports-will help propel demand for industrial automation equipment and boost the IAE global market.
Moreover, the global interdependence that hampered market expansion last year will prove to be a boon this time around, especially because growth of the United States in 2013 will not be a key requirement to foster overall expansion of the worldwide IAE space. The U.S. no longer needs to buoy the rest of the world-at least not for this year, Howell said.

Posted on June 21, 2013 - (115 views)
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