Studies & Reports
Business growth continued in the power transmission industry for the ninth consecutive quarter, but sales growth has slowed from past quarters, according to a new study by the PTDA. The PTDA Business Index found that the second quarter of 2012 was the ninth consecutive quarter for business growth among PTDA members, with a reading of 54.2. Compared with a reading of 75.4 for the first quarter of 2012, the recently released second-quarter results indicate the power transmission/motion control industry is still expanding but at a slower pace than before. Both distributors and manufacturers reported decelerated sales growth in the second quarter of 2012. PTDA members participating in the Business Index expect 2012 to be another year of sales growth with an average forecast of 8 per cent, down from 11 per cent in the first quarter survey.The PTDA Business Index full report is available through PTDA’s website. It includes U.S. and Canadian breakout data in addition to historical data.
India's industrial output fell a worse-than-expected 1.8 per cent in June, its third fall in four months, as slumping manufacturing and investment darken the outlook for Asia's third-largest economy. A 3.2 per cent fall in manufacturing output drove the decline, data released by the government Thursday showed. Production of capital goods – a sign of investment in things like machinery – fell a worrying 27.9 per cent.It is a far cry from last June, when mining, manufacturing and electricity output grew by 9.5 per cent.“Capital expenditure has dried up and manufacturing has now ground to a halt. Consumer demand is still solid, though below potential and is nowhere near enough to make up for the shortfall in business demand,” Moody's Analytics economist Glenn Levine said in an email.The poor numbers will put pressure on the central bank to cut its key interest rate even though inflation remains high and New Delhi has not enacted policy reforms –  like raising the diesel price to ease the fiscal deficit –  which the central bank and others say are key to unlocking India's economic potential.India's growth is at its lowest in almost a decade. The central bank recently cut its growth forecast for the year ending March 2013 to 6.5 per cent, but many private sector economists are saying that the economy won't even attain 6 per cent growth.Chandrajit Banerjee, director general of the Confederation of Indian Industry called the numbers “a cause for serious concern.”“Any further decline in GDP growth will have a deleterious effect on employment and on consumer demand,” he said in an email.
Strong demand for energy efficiency solutions in manufacturing is driving the low-power AC drives market, which expected to grow in 2012, according to a new ARC Advisory Group study. The study found the market for low-power AC drives experienced strong growth in 2011 as manufacturers and other industrial operations addressed initiatives for energy cost savings and reduced energy consumption. Researchers expect capital investments for low-power AC drives to grow as they save energy and raise productivity by offering more precise speed control and providing a quick ROI. “Low power AC drives are a key product for improving energy efficiency as well as sustainability in the manufacturing, infrastructure and building automation sectors,” ARC senior analyst Himanshu Shah, the principal author of ARC’s “Low Power AC Drives Worldwide Outlook,” said in a statement. “This will create significant growth opportunities for the low power AC drives market and its suppliers over the next five year forecast period. These factors make the use of low power AC drives easier to justify even during uncertain economic periods.”Industries in the mature economies are expected to invest further in improving the productivity and energy efficiency of their existing manufacturing operations. The trend toward intelligent building automation will further increase demand for low power AC drives in all economies, the study found.Compared to the developed economies, the Asian market, especially outside Japan, will continue to expand faster, but at a slower pace than previous growth. While China experienced strong low-power AC drives market growth in the recent past, future growth is expected to be a bit more modest, and key regional development opportunities will also be in Latin America, according to the ARC study.For more information on this study, please visit the ARC Advisory Group website.
After registering strong growth in May and June, Canada's manufacturing sector slowed to a four-month low in July, according to the RBC Canadian Manufacturing Purchasing Managers Index (RBC PMI). The headline RBC PMI - a composite indicator designed to provide a single-figure snapshot of the health of the manufacturing sector - signalled a solid improvement in Canadian manufacturing business conditions during July. However, at 53.1, down from 54.8 in June and below the series average of 54.2, the headline index indicated the weakest improvement since March.The RBC PMI found that the volume of new orders received by Canadian manufacturers rose in July, with this generally linked to greater client demand. However, new orders, as well as output, grew at sharply reduced rates compared to June. Employment increased at the slowest pace since April, though the rate of job creation remained solid overall, while the average price paid for inputs fell for the first time since October 2010."Canada's manufacturing sector continued to grow in July, albeit at a slower pace, suggesting global growth worries are weighing on the economy. Employment improved for the sixth consecutive month in the sector, with 21 per cent of firms hiring additional staff, largely driven by increased production," said Craig Wright, senior vice-president and chief economist, RBC. "As manufacturing conditions remain positive overall, we anticipate that further gains in employment and a pick-up in exports will support Canada's GDP growth in 2012."In addition to the headline RBC PMI, the survey also tracks changes in output, new orders, employment, inventories, prices and supplier delivery times.Key findings from the July survey include:• New orders and output grow, albeit at sharply reduced rates;• Solid increase in headcounts, but rate of job creation at three-month low; and• Average input costs fall for first time in 22-month series history.The volume of new orders received by Canadian manufacturers increased in July, continuing the trend that has been recorded in each month since the inception of the survey. Approximately 32 per cent of firms reported an increase in new work, with this generally linked to greater client demand. However, new export orders rose only marginally, partly reflecting weakness in the global economy. Subsequently, total new work intakes grew at a sharply reduced rate during the latest survey period.Reflective of the rise in new orders, production increased further during July. Although moderate, output growth was the slowest in four months. Meanwhile, firms depleted their stocks of finished goods, with a number of companies using existing inventories to fulfil some new order requirements. Concurrently, backlogs of work fell for the second month running and to a greater extent than in June.Employment in Canada's manufacturing sector rose for the sixth consecutive month in July. Approximately 21 per cent of firms hired additional staff since June, largely citing the increase in production. Although remaining solid, the rate of job creation nonetheless slowed to a three-month low.Regional highlights include:• Manufacturing operating conditions improved in all four Canadian regions in July. Quebec posted the strongest month-on-month improvement, while the weakest was reported in Ontario.• The volume of new orders received by manufacturers based in Ontario was unchanged from that recorded one month previously, but growth was recorded elsewhere.• Staffing levels increased in all four regions during July. The weakest rate of job creation was reported in Ontario.• July data indicated that average input costs fell in three regions. The only exceptions were Alberta and British Columbia, which saw a slight increase.
What’s the most important factor for manufacturing success? A new report says it is labour productivity. The survey, commissioned by Kronos Incorporated and conducted by IDC Manufacturing Insights, looked at 11 countries and found that labour productivity ranked highest as a factor for achieving manufacturing success. Factors such as modern infrastructure, government support, and foreign direct investment ranked in varying degrees after productivity.The survey asked manufacturers from Canada, Australia, Brazil, China, France, Germany, India, Mexico, Spain, the U.K., and U.S. about current trends in global manufacturing, and 70 per cent of all respondents cited manufacturing as the single most important industry for their country's economic health.When it comes to labour productivity, almost two-thirds (74.7 per cent) of respondents agreed that a high level of labour productivity is very or extremely important for achieving manufacturing success. When asked about factors that can improve workforce productivity, training and continuous improvement of the existing workforce was the top choice, with 68.2 per cent of all respondents noting it as effective. Investment in technology followed next, with 63.3 per cent.And what are some of the issues impacting productivity? The survey found that absences can get in the way, but not as much in Canada, which, along with Australia, the U.K. and the U.S. agreed absenteeism is not a significant issue. Brazil, France and Mexico, however, cited absenteeism as a bigger problem in manufacturing.How does the future of manufacturing look as a career option for the next generation? Survey respondents were optimistic, with 88.2 per cent of all respondents were very or somewhat positive about encouraging younger relatives to consider manufacturing as a practical career option.The respondents were also asked about one strategy that they would recommend for global competitiveness. The winning recommendation, at a combined 45.5 per cent, was that manufacturing companies should keep existing facilities as is and invest in workforce operational excellence methodologies, which comprise of strategies for more effective labour cost control, minimized labour law compliance risk, and improved workforce productivity."Manufacturers today are judged on a world stage and their treatment of labour is under the scrutiny of governments, downstream supply chain partners, and end consumers. With developed countries facing high levels of unemployment and falling wages, emerging nations can no longer rely on low cost labour as a growth strategy,” says Gregg Gordon, senior director, manufacturing practice group, Kronos and author of Lean Labor. “They will need to develop a skilled, productive workforce to compete globally. Also, as manufacturers seek growth internationally, they are required to invest in economic development by foreign governments; specifically good paying, local jobs. With increased global scrutiny, competition, and supply chain complexities, the workforce is becoming a competitive differentiator for manufacturers everywhere."
North American robotics companies sold more industrial robots in the second quarter of 2012 than any previous quarter in history, according to new statistics released by Robotic Industries Association (RIA), the industry’s trade group.A total of 5,556 robots valued at $403.1 million were sold to North American companies, a jump of 1p per cent in units and 28 per cent in dollars over the same quarter in 2011. Orders in the first half of 2012 totaled 10,652 robots valued at $747 million, increases of 20 per cent in units and 29 per cent in dollars over the same period last year.“Obviously, we’re thrilled about the great results so far this year,” said Jeff Burnstein, President of RIA. The strong sales reflect increased demand for robotics in industries such as automotive, plastics & rubber, and metals. However, as the economy slows, it’s not clear that these numbers will remain as strong heading forward.”Orders for spot welding robots, used primarily in automotive solutions, jumped 68 per cent in the first half of 2012. Other big jumps were seen in coating & dispensing (+42 per cent), arc welding (+20 per cent), and assembly (+19 per cent). Material removal orders, a smaller application area, rose 364 percent.Automotive related orders accounted for 65 per cent of units and 64 per cent of dollars in the first half of 2012. This represents sharp gains of 44 per cent in units and 56 per cent in dollars over the opening half of 2011.“It’s great that the auto related numbers continue to post huge gains, but as we know, automotive industry purchases are cyclical,” Burnstein explained. “However, we were disappointed to see non-automotive related orders fall eight percent in units and one percent in dollars in the first half of the year, with even sharper declines in the second quarter alone.”
Despite a sluggish economic recovery, 85 per cent of Canadian manufacturers are optimistic about the future of their business over the next two years, according to KPMG’s third annual survey of Canadian manufacturers.  KPMG’s “Canadian Manufacturing Outlook 2012: Push and Pull – Reducing Costs and Investing in Innovation” found Canadian manufacturers are more optimistic than last year (nine percentage points) and share a more positive outlook than that of their global counterparts. “Our survey tells us that Canadian manufacturers are confident in their business strategies, but investing in innovation, increasing efficiencies and managing risk are top-of-mind moving forward,” Laurent Giguère, national industry leader, industrial markets, KPMG in Canada, said in a statement. “As smaller, niche players operating with a strong dollar, Canadian companies realize they need to innovate in order to compete with lower-cost global producers.” The report found, however, that Canada has not seen disruptive, game-changing innovation, nor has it experienced process innovation that can revolutionize and drastically improve productivity in the manufacturing sector. But despite the lack of recent transformation, manufacturers do realize the impact innovation can have on their business and, more specifically, their bottom line – more than 60 per cent of Canadian respondents say the next wave of transformational innovation is underway or will be within the next 12 to 24 months. Canadian manufacturers also say they are striving to increase productivity and manufacture products at the lowest cost to stay competitive. In today’s increasingly global market, labour costs continue to be a priority for Canadian companies – half of respondents say reducing labour costs is the cost control method they expect to be most important over the next 12 to 24 months. Coming in at number two is exiting unprofitable product lines and/or geographies (46 per cent). As the number of Canadian manufacturing companies doing business in emerging markets rises, their investment in risk management strategies should increase as well – however, this is not the case. Canadian respondents plan to spend relatively less on risk management than their global counterparts in 2012. Currently, only five per cent of Canadian respondents use scenario/simulation planning to address aspects of risk management and 17 per cent of Canadian respondents “don’t know” how they’re going to identify risk in their supply chains over the next 12 to 24 months.
The market for photoelectric sensors experienced a collapse and a dramatic rebound in the last three years, according to a new ARC Advisory Group report. The report says the market is now back to the development behaviour seen in the past. As the market is strongly dependent on the investment climate, the situation has recently worsened, but ARC still expects a rather positive development for the coming years. “Photoelectric sensors have long been in a position in which there was simply no alternative, but now ultrasonic sensors as well as low-end vision sensors are targeting the same applications. While photoelectric sensors are still price competitive, they also add value for end users with more functions,” says ARC analyst Florian Güldner, the principal author of ARC’s “Photoelectric Sensors Worldwide Outlook” www.arcweb.com/market-studies/pages/photoelectric-sensors.aspx. The demand for sensing is increasing, with overall demand for sensors rising faster than for industrial automation in general. Still, the investment climate overshadows technological effects and trends from the plant floor. Growth in photoelectric sensors is directly linked to the business cycle. Automation demand is often supported by the spare parts business, modernization projects and longer project lead times. But sensor suppliers cannot count on these dynamics. In contrast, the relatively high share of sales through distributors emphasizes the effects from investment as distributors empty/fill up their stocks at the beginning of a development.
Implementation of RFID technology has grown 157 per cent since 2008, with more than half of companies saying they are already using the technology. The survey by CYBRA found that in 2008, only 21 per cent of companies surveyed used RFID. In 2012, 54 per cent of those surveyed are either using, piloting or in the process of implementing RFID technology.The survey also found that 81 per cent expected a return on investment (ROI) in three years or less, up 71 per cent from the 2008 survey.Of the respondents who claim they are already using RFID technology, 70 per cent are regular users or are in the implementation phase. The study also shows that only 19 per cent of respondents have no interest in RFID. These respondents also say typically worried about high costs and don’t see evidence of ROI.Other highlights from the new survey include:• Of organizations that are not yet using RFID technology, 70 per cent of respondents state that they have plans to implement RFID in the future.• Of organizations that were either implementing RFID or evaluating the use of RFID, 74 per cent of respondents indicate that they will do it not only for EPC (Electronic Product Code) compliance, but also to improve product track and trace capabilities.• Tracking products (67 per cent) and improved inventory management (62 per cent) remain the top two business drivers that determine RFID adoption.• The key anticipated benefits of RFID adoption are improved inventory accuracy (42 per cent), increased distribution center efficiency (30 per cent), and improved customer service (28 per cent).
The worldwide market for numerical control (NC) software grew by 10 per cent in 2011, according to a new report from CIMdata, Inc., a PLM consulting and research firm. The 2012 NC Market Analysis Report (MAR) is the twenty-first annual study of the global NC market. It estimates the growth based on end-user payments, which grew from $1.333 billion in 2010 to $1.469 billion in 2011. The market growth rate in 2011 reflects a strong overall PLM spend, continuing the recovery from the downturn in the global economy that manifested itself in dramatically higher machine tool sales into the manufacturing industry. It has been estimated that worldwide shipments of machine tools increased by 35 per cent from 2010 to 2011, which the report says is directly related to the CAM software employed to drive these tools. CIMdata also projects that in 2012 growth in manufacturing will continue and end-user payments for NC software will increase by 12.2 per cent to $1.649 billion. Since 2002, the NC software market has shown modest but steady growth as global economies generally improved. There has been worldwide growth in the sale of machine tools and manufacturing output; greater emphasis has been placed on the efficient operation of machine tools as manufacturing firms have strengthened their competitive position, and the overall PLM (Product Lifecycle Management) market, of which CAM software is a component, has continued on a strong growth path during this period. CAM software purchases are related to all of these factors—particularly machine tools. The 2012 NC Market Analysis Report is available for purchase at the CIMdata website.
The Canadian manufacturing sector has proven to be relatively immune to the rise in global economic uncertainty and weaker economic growth around the globe, according to a new report from the Conference Board of Canada. That’s one of the only bright spots in the Board’s Leading Indicator of Industry Profitability report, which also found that the profitability outlook for Canadian industries declined in June, falling 0.2 per cent for the second consecutive month. The biggest decline was in the oil industry, the report found, as the price of oil dropped significantly.But the good news for manufacturers is that despite a decline in the Conference Board of Canada’s Index of Business Confidence in the second quarter of 2012, manufacturing activity continued to grow in that period.In June, the RBC Canadian Manufacturing Purchasing Managers’ Index grew to an average reading of 54.3 over the second quarter, compared with 51.6 in the first quarter. (An index reading higher than 50 indicates expansion.) The numbers come despite a contraction in manufacturing activity in Europe, China and the U.S.The growth in the manufacturing sector resulted in a brighter profit outlook for several manufacturing industries, including the transport equipment manufacturing industry (up 1.2 per cent), auto manufacturing, auto parts, chemicals products, plastic and rubber products, machinery, food and beverages, non-metallic mineral products, furniture, pharmaceutical products, and even paper products.
The market for PLM software and services in China grew by 22.3 per cent to US$640.9 million in 2011, according to CIMdata’s 2012 China Product Lifecycle Management (PLM) Market Analysis Report.  This report provides detailed information and in-depth analysis on China’s rapidly-evolving mainstream PLM market. The report discusses the major China PLM trends and issues, PLM purchase investments in software and services, PLM adoption in various industry sectors, and market growth forecasts that pertain to this important and quickly expanding economic region. “Once again the global market had a strong year and China proved even stronger,” said Stan Przybylinski, CIMdata director of research. “In 2011, the Chinese Mainstream PLM market grew 22.3 per cent to US$640.9 million which is about 10 per cent higher than the growth rate of the global mainstream PLM market, and in 2012 the growth rate of the Chinese Mainstream PLM market is forecasted to be 13.9 per cent.” Chinese industries that are heavily investing in PLM include aerospace, automotive, high-tech, and mechanical machinery.Global PLM solution providers continue to invest in China and are expanding their partner networks and growing their customer bases. The leading international PLM providers include Dassault Systèmes, PTC and Siemens PLM Software, and these three firms accounted for nearly 54 per cent of China-based mainstream PLM revenues in 2011. “In the last year, several China-based ERP solution providers began offering PLM solutions, which illustrates how attractive this space has become,” said Peter Bilello, CIMdata president. “We had strong attendance at our first China PLM Market and Industry and Forum, from both local providers and mainstream international providers. In fact, in Shanghai we had the most fervent discussion of systems engineering, a very advanced PLM topic, of any of our four sessions around the world. Their end users see the importance of this topic to developing complex products, and the China-based PLM solution providers want to add capabilities to support them.”
Despite a looming economic crisis in Europe, the PLC and PLC-based PAC market will continue to grow, according to a report by ARC Advisory Group. While demand for automation remained strong for PLCs and PLC-based PACs during the first half of 2011, according to ARC, the pace of growth slowed as the year progressed, caused by the escalating sovereign debt crisis in a number of industrialized countries as well as specific concerns about some of the economies in southern Europe. But despite the looming financial crisis in Europe and instability in the Middle East, there are crucial factors that will continue to drive the use of automation, fueling PLC and PLC-based PAC market growth. That’s the conclusion of the study, “Programmable Logic Controller and PLC-based PAC Worldwide Outlook”.The globalization environment drives manufacturers and other industrial operations to address initiatives for energy cost savings and reducing energy consumption, as well as for safety and sustainability needs, the report found.“To offset rising energy costs and meet stricter environmental requirements, most industries want to steadily improve their productivity and efficiency in the area of energy consumption in particular.  This will drive the overall market growth positively in 2012 and beyond,” said senior analyst Himanshu Shah, the study’s principal author. Globalization is driving fundamental changes in how industry leaders set their business objectives. The objectives, such as improving plant or machinery utilization, yield, product quality, availability, safety, and delivery performance, strongly influence capital investments in automation. Automation suppliers, especially PLC and PLC-based PAC suppliers, are well positioned in this environment as this equipment is widely used across all industrial segments as companies face challenges to raise productivity, lower product costs, reduce plant operating expenses, and increase return on investment. To learn more about the report, visit the Arc Advisory Group website.
New and expanding applications, coupled with the shift to enhanced automation processes and controls, are restoring growth to the global market for proximity and displacement sensors, which suffered negative growth rates in 2009, according to a new Frost & Sullivan report.The report, “Analysis of the Proximity and Displacement Sensors Markets,” finds that the market earned revenues of $2,427.5 million in 2011 and estimates this to reach $3,048.1 million in 2018. The research covers inductive, photoelectric, capacitive, magnetic, ultrasonic and LVDT sensors. “The need for better automation is expected to allow for the conversion from older and less sophisticated controls to state-of-the-art automation,” Frost & Sullivan senior industry analyst V. Sankaranarayanan, said. “As a result, the number and range of sensors used in equipment is increasing.” Due to the rising sophistication in manufacturing processes, end-users are demanding more functionality from proximity sensors. Advanced network technologies (CompoNet and IO-Link) and diagnostic capabilities are some of the technical advancements that are also anticipated to boost market prospects. Growth in mature markets such as Western Europe and North America is expected to be slow. The potential for further growth is limited, as most industrial processes are already using proximity and displacement sensors. In contrast, Asia is becoming progressively more important due to surging production and automation. “Production in emerging economies, such as China and India, is becoming increasingly automated,” said Sankaranarayanan.  “Robust economic growth in these regions is expected fuel the demand for proximity and displacement sensors.” Proximity sensors find application in almost every industry (due to the importance of feedback), underlining the widespread consumer demand for them. In addition to China and India, growth opportunities are also surfacing in other smaller Asian countries that have embarked on a path of economic development. Keys to success will be emerging network technologies, solutions instead of products, regional growth markets and a successful distribution strategy. “It is important to offer more than just a sensor; market participants will have to focus on providing complete solutions,” said Sankaranarayanan. “Price pressures will continue to pose a challenge, so vendors will need to constantly advance on the technological front.”
Machine vision sales in North America fell two per cent compared to the first quarter of 2011, according to new statistics from AIA, the industry’s trade group. The decline resulted primarily from sales of complete vision systems, which account for the largest sales volumes in the North American market.  However, sales of machine vision components gained two per cent, led by strong growth in vision software (+26 per cent), lighting products (+11 per cent) and imaging boards (+7 per cent).  Smart camera sales rose four percent while optics sales were up one percent in the first quarter. “We are not surprised by the slight overall decline in growth,” said AIA President Jeff Burnstein in a statement.  “First quarter 2011 sales were exceptionally robust, occurring during the height of the market recovery.  Though the market has cooled down a bit, the long term growth trend remains strong.” Paul Kellett, AIA’s Director of Market Analysis, added, “Because of the strength of sales in the first half of 2011, we do not expect a dramatic increase in year-over-year growth in the near term.”  Industry executives appear to agree with this assessment, with a majority (57 per cent) expecting flat sales in the next two quarters of 2012, 30 per cent expecting a relative decline in sales, and 14 per cent anticipating an increase for the same time period.

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