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LV AC drives sales hit $14bn in 2023, but growth is slowing

06 February, 2024

More than 20 million low-voltage AC drives, worth more than $14bn, were shipped globally during 2023 as the market continued to expand, new data from Interact Analysis shows. But the pace of growth slowed during the year and is expected to continue to do so in 2024, before steady growth returns to the market in 2025. IA is predicting a CAGR of 4% over the period to 2028, in line with expectations for the manufacturing economy as a whole.

During the first half of 2023, strong backlogs fuelled growth in sales of LV AC drives, but drives vendors are reporting that sales fell substantially in the second half of the year. Following several years of higher average sale prices and unprecedented demand, the market slowed down, with a growth of just 2.7% during 2023.

The volatility experienced in the LV drives market during 2021 and 2022 has largely subsided, and this has affected prices. The average global selling price for drives fell by 0.3% in 2023, driven by price drops in the Asia-Pacific (Apac) region.

“The inflated price levels of many commodities, which led to an increase in selling price for drives in 2021 and 2022, have fallen substantially from their peaks in 2022,” says Interact research analyst, Brianna Jackson. “This has resulted in pressure from customers to decrease prices and we expect prices to erode further in 2024, shrinking by an estimated 1.5% during the year.”

Softer demand and downward price pressure will push markets into a period of contraction during 2024, with Interact predicting a global revenue growth rate of just 0.3%. This applies to every region except Apac, where growth in the Chinese manufacturing economy is expected to outstrip other major regions. IA expects China to account for 28% of global drive revenues this year.

The global market for LV AC drives from 2022-2028 showing revenues ($m, left-hand-axis, solid bars) and year-on-year growth (%, dotted line, right-hand axis)
Source: Interact Analysis

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