News: Outlook sunny for control and automation

01/03/2007


In two recent statements, ARC Advisory Group has drawn a sunny picture for industrial automation and control system suppliers, projecting that customer demand will remain strong and push annual growth higher than 6% over the next five years. The upward trend for process automation seen over the last two years will continue, thanks to the industry's ability to reduce manufacturing costs and increase efficiency. ARC's studies examine the overall process automation market and zero-in on distributed control systems (DCS).

The larger process automation market world-wide is estimated at $58 billion for 2005 and expanding with a compound annual growth rate (CAGR) of 6.4% for the next five years. That places it at just under $79 billion in 2010. Growth is spread all around the world, with China and India as major leaders. The Middle East energy boom is continuing unabated, pulling other industries with it.

DCS market growth will back off its blistering pace while maintaining major forward momentum. Between 2004 and 2005, ARC reckons that the market grew at a rate close to 9%. This will moderate to just under 7% annual growth for the next several years, placing the total market value at $16 billion in 2010. Again, Asia is a major engine, but many old systems in North America and Europe are slated for replacement.

Larry O'Brien, ARC research director, sees this as a symptom of larger development efforts. "Growth continues to be driven by buoyant capital spending and large infrastructural projects in Asia, Eastern Europe, the Middle East, and Latin America," he says. "These large grassroots undertakings are complemented by significant investment in the modernization of outdated control systems in the developed markets of North America, Western Europe, and Japan. At the same time, we are seeing a shift in spending toward the oil and gas, refining, petrochemical, power generation, and other traditional heavy process industries at a level that we have not seen in many years."

These predictions do, of course, hang on assumptions of political stability in major parts of the world and expectations that China's economy will not overheat. Should any of these happen, the situation could change in a very short time.

Control Engineering Daily Daily News Desk
Peter Welander
, process industries editor





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