Industrial generator market projected to rebound

IHS Markit expects generator suppliers expect to recoup margins from 2018-2020 as average selling prices maintain steady growth throughout the time period after the industry contracted in 2016.

01/17/2017


IHS Markit expects generator suppliers expect to recoup margins from 2018-2020 as average selling prices maintain steady growth throughout the time period after the industry contracted in 2016. Courtesy: IHS MarkitThe average selling prices of low- and medium-power generators contracted in all regions in 2016. This contraction was a result of low demand, low input costs, and constrained global capital expenditure. Premium suppliers have been hit the hardest by the recent dip in selling prices by relinquishing hard-earned margins to stay price competitive and maintain market share.

From an input perspective, commodity prices recovered from their subsequent plunge in early 2016. Intermediate component and material costs are now at record year-over-year increases for the first time since late 2013. This change is likely to lead suppliers to attempt to lift prices, most likely beginning in mid-2017. IHS Markit expects generator suppliers expect to recoup margins from 2018-2020 as average selling prices maintain steady growth throughout the time period.

According to research from the IHS Markit Generators Research Package, average selling prices are expected to stabilize in 2017. However, generator suppliers are finding other ways to add value in place of reducing overall selling prices. By providing a lengthier warranty than that of the competition, a generator supplier will be able to win orders through promoting reliability to the purchaser, though while also assuming some risk given the lengthier period of the warranty.

Additionally, generator suppliers are adding value to their products by engineering ways in which products are easier to maintain and install. One example of this method is the manufacturing of skid plates that are designed to be installed in a number of applications. A more universal generator skid plate provides an easier install process to the end-user compared with traditional skid plates which are manufacturer specific.

Despite average selling prices for low- and medium-power generators sliding to a five-year low in 2016, generator suppliers are remaining resilient and developing strategies like those mentioned in the previous paragraph to maintain market share. The market outlook for average selling prices becomes more favorable to suppliers beginning in 2017 as global capital expenditure is expected to increase.

Matt Tolley is an analyst for IHS Markit. IHS Markit is a CFE Media content partner. Edited by Chris Vavra, production editor, CFE Media, cvavra@cfemedia.com.

- See additional stories from IHS Markit linked below.



Engineers' Choice Awards
The Engineers' Choice Awards highlight some of the best new control, instrumentation and automation products as chosen by Control Engineering subscribers.
System Integrator Giants
The System Integrator Giants program lists the top 100 system integrators among companies listed in CFE Media's Global System Integrator Database.
System Integrator of the Year
Each year, a panel of Control Engineering and Plant Engineering editors and industry expert judges select the System Integrator of the Year Award winners in three categories.
How to Maximize Factory Automation Efficiency with Low Cost Machine Vision
This eGuide illustrates solutions, applications and benefits of machine vision systems.
Wireless Reliability in Harsh Environments
Learn how to increase device reliability in harsh environments and decrease unplanned system downtime.
Human Factors and the Impact on Plant Safety
This eGuide contains a series of articles and videos that considers theoretical and practical; immediate needs and a look into the future.
July 2018
Ladder logic best practices and object-oriented programming, safety instrumented systems, enclosure design issues and challenges, process control advice
June 2018
Discrete and process sensor fundamentals, autotuning controls, system integrator roundtable
May 2018
Salary and Career Survey, IT and OT convergence, robotic standards and safety, secure circuit protection
Edge Computing
This article collection contains several articles on how today's technologies heap benefits onto an edge-computing architecture such as faster computing, better networking, more memory, smarter analytics, cloud-based intelligence, and lower costs.
Data Center Design
Data centers, data closets, edge and cloud computing, co-location facilities, and similar topics are among the fastest-changing in the industry.
PLCs
Programmable logic controllers (PLCs) represent the logic (decision) part of the control loop of sense, decide, and actuate. Featured articles in this digital report compare PLCs and programmable automation controllers (PACs), industrial PCs, and robotic controllers.
SIDB

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

June 2018
Machine learning, produced water benefits, progressive cavity pumps
April 2018
ROVs, rigs, and the real time; wellsite valve manifolds; AI on a chip; analytics use for pipelines
February 2018
Focus on power systems, process safety, electrical and power systems, edge computing in the oil & gas industry
John O. Ayuk, PE, CFSE, PMP, CAP
Automation Engineer; Wood Group
Doug Baker
System Integrator; Cross Integrated Systems Group
Jose S. Vasquez, Jr.
Jose S. Vasquez, Jr.
Fire & Life Safety Engineer; Technip USA Inc.
Data Centers: Impacts of Climate and Cooling Technology
This course focuses on climate analysis, appropriateness of cooling system selection, and combining cooling systems.
Safety First: Arc Flash 101
This course will help identify and reveal electrical hazards and identify the solutions to implementing and maintaining a safe work environment.
Critical Power: Hospital Electrical Systems
This course explains how maintaining power and communication systems through emergency power-generation systems is critical.
Engineers' Choice Awards
The Engineers' Choice Awards highlight some of the best new control, instrumentation and automation products as chosen by Control Engineering subscribers.
System Integrator Giants
The System Integrator Giants program lists the top 100 system integrators among companies listed in CFE Media's Global System Integrator Database.
System Integrator of the Year
Each year, a panel of Control Engineering and Plant Engineering editors and industry expert judges select the System Integrator of the Year Award winners in three categories.
How to Maximize Factory Automation Efficiency with Low Cost Machine Vision
This eGuide illustrates solutions, applications and benefits of machine vision systems.
Wireless Reliability in Harsh Environments
Learn how to increase device reliability in harsh environments and decrease unplanned system downtime.
Human Factors and the Impact on Plant Safety
This eGuide contains a series of articles and videos that considers theoretical and practical; immediate needs and a look into the future.
July 2018
Ladder logic best practices and object-oriented programming, safety instrumented systems, enclosure design issues and challenges, process control advice
June 2018
Discrete and process sensor fundamentals, autotuning controls, system integrator roundtable
May 2018
Salary and Career Survey, IT and OT convergence, robotic standards and safety, secure circuit protection
Edge Computing
This article collection contains several articles on how today's technologies heap benefits onto an edge-computing architecture such as faster computing, better networking, more memory, smarter analytics, cloud-based intelligence, and lower costs.
Data Center Design
Data centers, data closets, edge and cloud computing, co-location facilities, and similar topics are among the fastest-changing in the industry.
PLCs
Programmable logic controllers (PLCs) represent the logic (decision) part of the control loop of sense, decide, and actuate. Featured articles in this digital report compare PLCs and programmable automation controllers (PACs), industrial PCs, and robotic controllers.
SIDB

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

June 2018
Machine learning, produced water benefits, progressive cavity pumps
April 2018
ROVs, rigs, and the real time; wellsite valve manifolds; AI on a chip; analytics use for pipelines
February 2018
Focus on power systems, process safety, electrical and power systems, edge computing in the oil & gas industry
John O. Ayuk, PE, CFSE, PMP, CAP
Automation Engineer; Wood Group
Doug Baker
System Integrator; Cross Integrated Systems Group
Jose S. Vasquez, Jr.
Jose S. Vasquez, Jr.
Fire & Life Safety Engineer; Technip USA Inc.
Data Centers: Impacts of Climate and Cooling Technology
This course focuses on climate analysis, appropriateness of cooling system selection, and combining cooling systems.
Safety First: Arc Flash 101
This course will help identify and reveal electrical hazards and identify the solutions to implementing and maintaining a safe work environment.
Critical Power: Hospital Electrical Systems
This course explains how maintaining power and communication systems through emergency power-generation systems is critical.
Engineers' Choice Awards
The Engineers' Choice Awards highlight some of the best new control, instrumentation and automation products as chosen by Control Engineering subscribers.
System Integrator Giants
The System Integrator Giants program lists the top 100 system integrators among companies listed in CFE Media's Global System Integrator Database.
System Integrator of the Year
Each year, a panel of Control Engineering and Plant Engineering editors and industry expert judges select the System Integrator of the Year Award winners in three categories.
How to Maximize Factory Automation Efficiency with Low Cost Machine Vision
This eGuide illustrates solutions, applications and benefits of machine vision systems.
Wireless Reliability in Harsh Environments
Learn how to increase device reliability in harsh environments and decrease unplanned system downtime.
Human Factors and the Impact on Plant Safety
This eGuide contains a series of articles and videos that considers theoretical and practical; immediate needs and a look into the future.
July 2018
Ladder logic best practices and object-oriented programming, safety instrumented systems, enclosure design issues and challenges, process control advice
June 2018
Discrete and process sensor fundamentals, autotuning controls, system integrator roundtable
May 2018
Salary and Career Survey, IT and OT convergence, robotic standards and safety, secure circuit protection
Edge Computing
This article collection contains several articles on how today's technologies heap benefits onto an edge-computing architecture such as faster computing, better networking, more memory, smarter analytics, cloud-based intelligence, and lower costs.
Data Center Design
Data centers, data closets, edge and cloud computing, co-location facilities, and similar topics are among the fastest-changing in the industry.
PLCs
Programmable logic controllers (PLCs) represent the logic (decision) part of the control loop of sense, decide, and actuate. Featured articles in this digital report compare PLCs and programmable automation controllers (PACs), industrial PCs, and robotic controllers.
SIDB

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

June 2018
Machine learning, produced water benefits, progressive cavity pumps
April 2018
ROVs, rigs, and the real time; wellsite valve manifolds; AI on a chip; analytics use for pipelines
February 2018
Focus on power systems, process safety, electrical and power systems, edge computing in the oil & gas industry
John O. Ayuk, PE, CFSE, PMP, CAP
Automation Engineer; Wood Group
Doug Baker
System Integrator; Cross Integrated Systems Group
Jose S. Vasquez, Jr.
Jose S. Vasquez, Jr.
Fire & Life Safety Engineer; Technip USA Inc.
Data Centers: Impacts of Climate and Cooling Technology
This course focuses on climate analysis, appropriateness of cooling system selection, and combining cooling systems.
Safety First: Arc Flash 101
This course will help identify and reveal electrical hazards and identify the solutions to implementing and maintaining a safe work environment.
Critical Power: Hospital Electrical Systems
This course explains how maintaining power and communication systems through emergency power-generation systems is critical.
click me