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Globalisation drives automation market towards $40bn

01 January, 2006

The world market for automation equipment used by discrete industries is expected to expand by an average of 7% over the coming years, to exceed $38bn by 2009. This forecast comes from the ARC Advisory Group which, in a separate report, predicts that sales of high-power AC drives will grow even faster over the same period - recording a CAGR of 8.9% - to reach a total of more than $3.2bn by 2009.

According to ARC, the automation market, which was worth $27bn in 2004, is being driven by globalisation, with a continued infusion of capital for automation in many industries and regions of the world.

"Although overall capital expenditures have remained flat in previous years, globalisation is causing manufacturers to allocate increased investments in automation, in order to drive down costs and raise the quality of their manufactured products," says the report`s principal author, Himanshu Shah.

China is the main growth driver for the automation market while India is providing increasingly bright prospects, ARC says. Japan has made an unexpected resurgence, while raising wage levels in Eastern Europe have also led to a surge in automation investments.

Growth in the high-power drives market is being spurred by rising energy prices, ARC suggests. "With energy costs increasing and drive prices falling, the payback period is becoming shorter, helping users to justify capital expenditure on AC drives," says Shah.

Other factors boosting the sales of drives include investments by developing countries, such as China and India, in infrastructure-related industries such as power, oil and gas, mining and cement production. ARC predicts that new markets, such as drives for hybrid electric vehicles, will also lift the demand for drive technologies.

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