Study shows growth ahead for discrete industries automation products

Dedham, Mass. – The worldwide market for automation products and services for discrete industries, nearly $25 billion in 2001, is expected to grow at a healthy compound annual growth rate (CAGR) of 7.9 percent over the next five years, reaching over $36 billion, according to a new ARC Advisory Group study.

The economy ran out of steam during the latter part of 2000, continued to decline during most of 2001, and is expected to struggle through the first half of 2002. ‘In spite of this dismal economic scenario, overall, the future of automation products serving discrete industries looks bright during the next five-year period. More capital spending is projected in electronics, semiconductors, building automation, and machinery industries,’ according to ARC Senior Analyst Himanshu Shah ( hshah@arcweb.com ), the principal author of ARC’s ‘Automation for Discrete Industries Worldwide Outlook, Market Analysis & Forecast Through 2006.’

Several factors are cited in the study. Advancements in technology bring more functionality, ease of use, and lower cost to automation products. Wide acceptance of the PC as an integration platform for HMI, logic solving, motion control, and vision systems makes the use of automation easier across the plant floor. Progress in establishing networking standards, a single programming and diagnostic environment, and standards for data exchange facilitates integration of various automation elements in a consistent manner, further fueling the growth.

Users strongly believe that leading edge automation is the key to staying competitive. They continue to demand better quality products, with more variety, faster delivery, and at a lower cost. This will propel growth for automation products and services in all five regions of the world.

Automation suppliers are facing special challenges to keep revenue growing while maintaining profit margins. The marketplace is global and fiercely competitive with declining margins as prices are lowered. To succeed in this environment, small and large suppliers need to form joint ventures and alliances with overseas companies to battle against competition, penetrate new markets, or increase presence in new regions. This study recommends strategies to remain successful in this tough economic climate.

The study analyzes market data for a broad spectrum of automation products, such as Programmable Logic Controller (PLC), General Motion Control (GMC), Computer Numeric Control (CNC), AC Drives, Human Machine Interface (HMI), Operator Interface Terminal (OIT), Material Handling Control Systems Software (MHCS), and Collaborative Production Management (CPM).

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