Automation market for discrete industries to exceed $30 billion
Dedham, MA—The total automation business to the world’s discrete industries is expected to grow at a 6.1% compound annual growth rate (CAGR) over the next five years, surpassing $30 billion in 2007, according to ARC Advisory Group’s latest study
Dedham, MA— Despite the recent global economic tailspin, the overall future of automation products serving the discrete industries looks bright over a five-year period, according to ARC Advisory Group . The total automation business to the world's discrete industries is expected to grow at a 6.1% compound annual growth rate (CAGR) over the next five years, surpassing $30 billion in 2007, according to ARC's latest study, 'Total Automation Business for the Discrete Industries Worldwide Outlook.'
'There are still many pockets of reliable growth in the discrete automation business. Industries such as building automation, electronics and semiconductor, automotive, and plastics machinery will continue to perform well,' says Himanshu Shah, ARC's senior analyst and principal author of the study.
The study found several factors that will drive growth in the discrete industries. For instance, the average performance for manufacturing plants across many industries can be raised to a much higher level using better controls. Effective use of modern automation technology presents a major opportunity for manufacturers to increase productivity and reduce costs to stay competitive. Consequently, this also becomes a growth opportunity for the discrete automation products.
Likewise, continuous advancements in semiconductor and electronic products will likely fuel revenue growth for automation products. Additionally, automotive manufacturers, facing fierce global competition, will expand adoption of advanced automation technologies in more areas to reduce unit cost and increase quality. The high cost of energy will also drive increased use of automation products in building automation and manufacturing plants.
ARC's report adds that major automation suppliers have been battered lately as global competition and downward pricing pressures have eroded margins and reduced revenues. However, progressive suppliers are offering more services and broader solutions to offset declining revenues. Top tier companies are developing facilities outside their home countries. Besides global sales and support capabilities, these foreign facilities typically include technical staff to support new projects, local industry expertise, trainers, logistic and customer service centers, and web-enabled support structures.
Asian, Latin American
Demand-side indicators for manufacturing remain weak in both North America and Europe during the earlier part of the forecast period. In Europe, economists are cutting their growth figures for the European Union during the earlier period. The North American region expects to grow at a faster rate compared with the Europe, Middle East and Africa region, while Japan will see the least growth during the next five years. Latin America represents the highest growth area for total process automation, followed by the developing regions of Asia.
For more information, visit www.arcweb.com/res/tadww .
Control Engineering Daily News Desk
Jim Montague, news editor