ARC Advisory Group: DCS Market to Grow through 2011
August 2, 2007 // Published as a news service by IHS
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The distributed control systems (DCS) market experienced unprecedented growth in 2006, increasing by more than 14% compared with 2005, and is expected to continue growing at a healthy rate through 2011, according to an ARC Advisory Group study.
Indications are that growth for 2007 could approach the levels of 2005-2006 but will probably not exceed them.
ARC Advisory Group expects the current growth phase of the global market for automation to last through the next several years.
While the overall market remains strong and will continue to grow, odds are we will not see the stellar growth in the automation marketplace that occurred between 2005 and 2006, and the demand side economic indicators seem to agree with this assessment.
Opportunities still exist in Asia, the Middle East, Eastern Europe and Latin America, but the developed markets, such as North America and Western Europe, are beginning to show signs of sluggishness, ARC said.
"In the long term, our view of the market is still positive due to continued high energy prices, the growing demand for energy globally and the continued need on the part of manufacturers to improve plant operations, meet regulatory requirements and modernize an aging installed base," said Larry O'Brien, ARC research director.
Other ARC findings include the following:
- Services remain top growth business for automation.
Automation suppliers continue to benefit from demand for automation services across the spectrum of the plant lifecycle and the scope of nearly all automation products and applications. Automation services are at the top of the crest of the growth cycle and benefiting from converging factors that will provide increasing market growth through the next five years.
- Fieldbus contributes to growth in automation systems.
Fieldbus tools are being deployed in greater numbers. As their lifecycle benefits become more apparent, fieldbus is becoming more accepted in a wider range of industries and by greater numbers of end-users, ARC said. More large plants and critical applications are using fieldbus tools, which is becoming a corporate standard for many manufacturers.
- Asia continues to drive global market.
China and India are poised for significant long-term growth. According to ARC, both countries are increasing their focus on manufacturing for export, in addition to developing infrastructure, investing in basic industries and in training personnel to operate automation plants.
China is still the primary catalyst for global growth in the automation industry. ARC expects that China will be the single biggest geographical market for automation products and services in 20 years. China's value-added industrial output rose 18.1% versus the same period last year. World Bank has raised its growth expectations for the China economy to 10.4% for 2007, versus its previous forecast of 9.6%. The China economy expanded by 11.1% in the first quarter.
Indian industrial production increased by 13.6% in April, driven by increases in manufacturing, according to ARC. The index of industrial production grew by 13.6% in April 2007 compared with the same period in 2006, while manufacturing increased 15.1% and electricity generation increased by 8.7%.
For more details about the ARC report, titled Distributed Control Systems Worldwide Outlook, go to http://www.arcweb.com.
Source: ARC Advisory Group.