More Growth Seen in Process Automation

Almost in spite of themselves, manufacturers in many industries will be increasing capital expenditures for plant equipment over the next few years, according to a recent study by Dedham, MA-based ARC Advisory Group. The process automation market, according to the study, “Total Automation Business for the Process Industries Worldwide Outlook,” will likely continue to grow at a compounded annual growth rate of 5.1% over the next five years, reaching $64 billion in 2008, up from $50 billion in 2003.

The impetus for this expected growth will be global competition. Manufacturers increasingly will rely on real-time performance management to track plant productivity. Although the ARC study describes the expected plant capital expenditure rates as “modest,” the forces that will spur growth are significant. They include a shift of the manufacturing base to yet lower-cost regions of the world, with the corollary that more developed regions will see slower growth than previously. Since low-cost labor is a necessary element in finding competitive advantages in manufacturing, it is no surprise that China is the single largest country driving growth in industrial products and services for process industries, followed by India, cited as building infrastructure and modernizing its manufacturing base.

The study finds that most growth in automation currently is related to services, many linked to collaborative partnerships between suppliers and users. Also tagged “high growth sectors” are safety systems and software, while suppliers seem to be focusing also on pharmaceuticals, food and beverages, and water and wastewater. For more information, visit http://www.arcweb.com.

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