- THE MAGAZINE
- WEB EXCLUSIVES
Industrial automation equipment is purchased largely for manufacturing processes, which is a key element in a country’s gross domestic product (GDP) and is generally indicative of economic health. Machinery production output drives demand for nearly half of the total industrial automation equipment market. Early indicators for first quarter machinery production output show slowed growth in most regions, with the exception of the U.S. market.
“Several countries in Europe have slipped back into recession in 2012 and with the potential of Greece exiting the Eurozone, European markets have continued to be plagued by uncertainty and instability,” says Sarah Sultan, research analyst at IMS Research. “Though austerity measures in Europe and in the U.S. have impacted public investment into automation equipment, large declines in these markets are unlikely as most investment in industrial automation comes from the private sector.”
The U.S. economy has improved substantially, and both machinery production and end equipment markets are performing well in the beginning of the year. Machinery production in the U.S. had a very strong first quarter with approximately 8% growth, compared to the first quarter of 2011. The Americas region in total comprised of North and South America, is poised for strong growth in industrial automation equipment in 2012, and performed the best in the first quarter according to quarterly equipment trackers with positive growth across several equipment types compared to the first quarter of 2011.
“Combined, the Americas and Asia Pacific regions account for 65% of the global market for industrial automation electronics,” Sultan adds. “Asia is the largest consumer of industrial automation products, and the relative strength of its economy in 2012 is predicted to lead to spending of $64 billion, which represents nearly 40% of the global market.
“Although China’s forecast GDP growth of 8.2% in 2012 is the slowest it’s been in years, activity is expected to pick up in the second half of 2012 due to a recovery in Europe and increased governmental policies influencing industrial automation in China. Resurgence in the Chinese economy will also influence Latin America, which has slowed recently due to a strong reliance on investment from China.”