EMEA revenue growth for hazardous area equipment to halve in 2013

Revenue in 2013 for hazardous area equipment is forecast to reach €2.67 billion, growing at 5.2%, just half the rate of 2012.


IHS Inc.Sales revenue this year of hazardous area equipment in the Europe-Middle East-Africa (EMEA) region will grow by less than half of what was estimated in 2012, but will then stabilize from 2014 onward, according to a recently published report from IMS Research, now part of IHS. 

Revenue in 2013 for hazardous area equipment is forecast to reach €2.67 billion, growing at 5.2%, just half the rate of 2012. Prospects for next year are predicted to improve when revenue hits €2.91 billion, representing growth of 8.9%.

By 2016, revenue will amount to €3.4 billion, equivalent to a five-year compound annual growth rate of 8.4%. In general, unit shipments are forecast to grow at a slightly higher rate reflecting overall price pressure. An exception to this growth is low-voltage motors, which are subject to increased product development and material costs as they are increasingly required to meet legislation that demands greater operating efficiency.

The market for hazardous area equipment is highly influenced by capital expenditure in the oil and gas industry, said John Morse, senior analyst for discrete automation and author of the report. “Not all orders for any specific project are issued the moment a project is awarded. Orders are scheduled throughout the build, and so have the effect of delaying and smoothing out the demand pattern.”

Morse continued: “The factors influencing the predicted decline in EMEA growth became clear from interviews conducted during research for the report. During 2011 and 2012, uncertainty of the euro, the troubled economies of some EU countries and political unrest in parts of the Middle East and North Africa, all resulted in projects being temporarily put on hold. Such factors were forecast to affect orders in 2013, when those projects would normally be in progress.”

Even so, the report concludes that the longer-term prospects for hazardous area equipment sales in EMEA look bright. The euro did not collapse in 2012 and unrest, though still present in some Middle Eastern countries, has not seriously affected world economies.

Projects delayed during the latter part of 2012 are predicted to revive during this year, generating the return to greater revenue growth from 2014 to 2016.

Source: IHS, Inc.

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