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Distributed control systems market hits new high, study says


August 22, 2012
By Manufacturing AUTOMATION

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The year 2011 showed a resurgence in the Distributed Control Systems (DCS) market compared to 2009 and 2010, when the effects of the worldwide financial crisis and recession were most apparent, a new study has found.

 According to a new ARC Advisory Group study, “Distributed Control Systems Worldwide Outlook,” the recovery in the market to all time new highs was driven by new projects in the traditional heavy process industries as sales orders in 2010 translated into revenue in 2011.  The industry verticals of electric power generation and oil & gas were particularly strong.  Since these verticals are some of the largest in the DCS marketplace, the overall DCS marketplace showed an upswing.  The metals & mining sector also showed significant above average growth, even though this sector is not very large.

The resurgence in power generation projects, particularly in the nuclear and gas-fired combined cycle sectors, increased demand for DCSs.  In the developed regions, the emphasis was and will remain on improving efficiency, reducing emissions, and improving ramp rates.  The emerging countries, China in particular, are undergoing a shift from coal-fired power generation to nuclear, wind, and solar generation.  The resurgence in power generation projects — including many large greenfield projects — will not only drive demand for DCSs, but also for CPM, APC, optimization, and training simulators.

While 2011 showed a strong resurgence in revenue numbers surpassing the 2008 peak, ARC expects the revenue to return to its normal slow but steady growth rate with a CAGR of approximately 3 to 4 per cent over the five year period of 2011 – 2016.  Most DCS suppliers reported very strong order rates during late 2011 and the first quarter of 2012; however, projections for sales orders in the remainder of 2012 are tailing off.  The DCS market has a lag between orders and revenue approaching nine months on average, due to the heavy concentration of project business in the market, and because of this lag, ARC is projecting an average growth rate in DCS revenue in 2012.

For more information on this study, visit the ARC Advisory Group website.