Medium-voltage drives to see accelerated growth globally in 2013, despite European market contraction

The European market experienced serious economic woes in 2012 as both public and private investment withered due to the sovereign debt crisis, which has outlasted expectations.

02/28/2013


IMS Research (acquired by IHS, Inc.)Uncertainties surrounding at-risk economies and political change-over impacted the medium-voltage (MV) drive market in 2012, leading to year-over-year revenue growth of 8.8 percent; far less than 2011’s 20 percent market growth. A global report on MV motor drives published by IMS Research (now part of IHS Inc.) projects fewer of these instabilities in the US and Chinese MV drives markets in 2013, which is predicted to boost global market growth to 10 percent, amid a contraction of 4.6 percent in Europe.

The European market experienced serious economic woes in 2012 as both public and private investment withered due to the sovereign debt crisis, which has outlasted expectations. MV drive growth in 2012 was comparatively weak to other regions (at just above 2 percent), as most revenue was limited to the first few months of the year coming from residual projects. According to IHS analyst Kevin Schiller, “Based on continued public sovereign debt tensions and a Eurozone GDP growth of -0.3 percent in 2013, projected MV drive revenues in Western Europe are nearly 5 percent lower than 2012 levels, before rebounding slightly in 2014.”

In 2012, potential changes in the political environment led to hesitant spending in both China and the US, impacting a few domestic Chinese MV drives manufacturers who reported a decline in revenues in 2012. Leadership transition in China came at a crucial time for fiscal planning in the country; following years of explosive growth in China, real fixed capital formation growth fell for the third consecutive year – from 22.5 percent growth in 2009 to 7 percent in 2012 – adding to fears of a hard landing for the Chinese economy.

Likewise, the 2012 election year in the US caused sensitivities around potential changes to government spending and taxation, as a change in political party majorities could have thwarted negotiations required by the ‘fiscal cliff’ deadline at the end of 2012. A breach of this deadline would have almost certainly resulted in a recession, and a severe decline in capital expenditures in key MV drives markets, like the metals industry.

The outlook for 2013 indicates that the concerns of the past year in China and the US have largely abated, as the new leadership in China provided further stability and a deal was achieved which averted the fiscal cliff. Schiller added, “Indications in China imply stronger medium-voltage drives growth in 2013. Although exports continue to be a concern to manufacturing markets, government-funded infrastructure projects in 2013 will provide fiscal injections to the Chinese MV drives market, and are forecast to result in accelerated revenue growth of almost 10 percent, compared to 4 percent in 2012.”

The US is also due to experience augmented growth following the election year, as little changed concerning elected party majorities. Opposing parties submitted an unsurprising last-minute fiscal cliff compromise, preventing economic downturn.  Due to these stabilizing indicators for the US economy, MV drive revenue growth in the Americas is projected to expand to over 19 percent from 2012, primarily due to its prosperous oil & gas market.

Source: IMS Research

See other research on the Control Engineering web site.



No comments
The Engineers' Choice Awards highlight some of the best new control, instrumentation and automation products as chosen by...
Each year, a panel of Control Engineering editors and industry expert judges select the System Integrator of the Year Award winners.
The Engineering Leaders Under 40 program identifies and gives recognition to young engineers who...
Learn how to increase device reliability in harsh environments and decrease unplanned system downtime.
This eGuide contains a series of articles and videos that considers theoretical and practical; immediate needs and a look into the future.
Learn how to create value with re-use; gain productivity with lean automation and connectivity, and optimize panel design and construction.
Go deep: Automation tackles offshore oil challenges; Ethernet advice; Wireless robotics; Product exclusives; Digital edition exclusives
Lost in the gray scale? How to get effective HMIs; Best practices: Integrate old and new wireless systems; Smart software, networks; Service provider certifications
Fixing PID: Part 2: Tweaking controller strategy; Machine safety networks; Salary survey and career advice; Smart I/O architecture; Product exclusives
The Ask Control Engineering blog covers all aspects of automation, including motors, drives, sensors, motion control, machine control, and embedded systems.
Look at the basics of industrial wireless technologies, wireless concepts, wireless standards, and wireless best practices with Daniel E. Capano of Diversified Technical Services Inc.
Join this ongoing discussion of machine guarding topics, including solutions assessments, regulatory compliance, gap analysis...
This is a blog from the trenches – written by engineers who are implementing and upgrading control systems every day across every industry.
IMS Research, recently acquired by IHS Inc., is a leading independent supplier of market research and consultancy to the global electronics industry.

Find and connect with the most suitable service provider for your unique application. Start searching the Global System Integrator Database Now!

Case Study Database

Case Study Database

Get more exposure for your case study by uploading it to the Control Engineering case study database, where end-users can identify relevant solutions and explore what the experts are doing to effectively implement a variety of technology and productivity related projects.

These case studies provide examples of how knowledgeable solution providers have used technology, processes and people to create effective and successful implementations in real-world situations. Case studies can be completed by filling out a simple online form where you can outline the project title, abstract, and full story in 1500 words or less; upload photos, videos and a logo.

Click here to visit the Case Study Database and upload your case study.