Manufacturing AUTOMATION

Global automation markets on track to return to pre-recession levels this year: ARC

December 19, 2011
By ARC Advisory Group

Based on the growth in incoming orders for new project business seen throughout the year, ARC expects a rebound to healthy growth for automation shipments to many of the “hot” developing countries for 2011. ARC also expects many of the developed regions to rebound back to moderate health in 2011, as many suppliers have seen their aftermarket business come back on line.

“Consequently, ARC feels the global automation markets are on track to return to pre-recession shipment levels in 2011,” according to senior analyst David Clayton, the principle author of ARC’s “Automation Expenditures for Process Industries Worldwide Outlook” study.

Even though the global manufacturing economy seems on track to return to pre-recession shipment levels in 2011, risks remain. High oil prices due to growing demand from emerging nations and continuing political turmoil in the Middle East could upset growth. U.S. unemployment rates continue to be a deterring factor, as does the European debt crisis. Due to the numerous risks still present and the lag between orders and final shipment for new project business, short-term prospects for the market range widely by region and industry. While most sectors are expected to experience positive growth over the forecast period, growth in the oil and gas and electric power markets will drive the overall market growth positively in 2011 and beyond.

The global automation index saw a sizeable jump in Q4 2010, generating a value of 198; a twelve point increase over the Q3 2010 value of 186. The index continued to grow in Q1 2011, registering a value of 205 – a seven point increase from Q4 10. Although the global index is still expanding, it is growing at a decreasing rate and only one regional index – Asia – witnessed growth in Q1 2011. This decreasing growth rate in the global index is the result of stagnant first quarter growth in the U.S. index, a significant decrease in the European index, and strong growth in the Japanese index, as first quarter growth was strong in Japan before the tsunami in March.


The growth from Q1 2010 to Q1 2011 is nearly 20 percent in the global and U.S. index, 21 percent in the Asian index, and 14 percent in the European index. Even though these numbers are encouraging, ARC says that the double-digit Yo-Yo growth rates are more heavily influenced by the weak 2010 results than the strong showing in Q1 2011.

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