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Automation market bounces back after two flat years

11 April, 2014

After performing weakly for the past two years, the global market for industrial automation equipment (IAE) is poised for stronger growth in 2014, according to a new report from IHS Technology. 

Global IAE revenues will reach $185.3bn in 2014, a 7% increase from the $173bn earned in 2013, IHS predicts. This will mark a return to more vigorous growth after revenue increases of just 1.2% and 3.4% in 2012 and 2013, respectively. After the recession a few years earlier, the sector had initially bounced back with expansion rates in the double digits. IHS predicts that the healthy growth will now continue, with takings hitting $225bn by 2017.

“Following two years of weak development in the IAE trade, 2014 will see stronger market conditions that will help generate business opportunities,” says Jenalea Howell, associate director for rotating machines and controls at IHS. “In particular, the stabilising economies of China and Europe will be beneficial to spurring growth this year in overall industrial automation, allowing the market to outstrip last year’s performance.”

Motors and motor controls will be the largest IAE product segment in 2014, accounting for 40% of total revenues, followed by automation equipment on 31%, and power transmission equipment on 29%.

Asia-Pacific will be the fastest-growing region, followed by the Americas, Japan and the EMEA (Europe, Middle East and Africa) region. EMEA, however, is projected to deliver the largest share of revenue at $61.5bn, followed by Asia-Pacific, the Americas and Japan.

According to Howell, energy efficiency is continuing to drive growth in the IAE market’s biggest segment – motors, generators and motor controls. However, the trends toward sophisticated products are being tempered by the need for more basic functions.

In the automation equipment sector, demand for enhanced communications and more sophisticated machine controls will drive technical advances, especially in the discrete controller markets, IHS suggests. The risk to controllers from cybersecurity attacks will prompt product developments aimed at thwarting these attacks.

The power transmission market will be affected by the shift from mechanical to electrical technologies. For instance, pneumatic and hydraulic actuators will be replaced increasingly by electromechanical systems. A move to more efficient motors will also boost the importance of gearing, with attention focusing on combined system efficiencies.

The global market for industrial automation equipment, showing predicted revenues and annual growth rates
Source: IHS

The increasing consumption of processed food and the higher income levels of consumers in many countries will lead to an increased demand for the machinery needed to make those goods, says IHS.

The analyst identifies three market developments that, it thinks, will help the IAE market to continue to grow:

•  convergence, which will transform manufacturing from a productivity-driven process to one that is controlled by digital information;

•  3D printing, which could represent another turning point, offering possibilities likely to alter the manufacturing landscape dramatically; and

•  the combination of an ageing workforce of skilled engineers with low rates of replacement, which will continue to pose a significant concern to manufacturers, particularly in the West.

Increasing levels of automation and semi-autonomous robots will ultimately drive a transition to the automatic factory, IHS predicts.




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