Worldwide DCS Market Experiences Growth Resurgence
The Distributed Control Systems (DCS) market experienced unprecedented growth in 2006, increasing by over 14% compared to 2005, and it is expected to continue growing at a healthy rate through 2011. Does 2006 represent the peak year for growth in the market? It is too early to tell halfway through 2007, but indications are that growth could approach the levels of 2005-2006, but will probably not exceed it.
ARC 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 that there will not be the stellar growth in the automation marketplace that was present between 2005 and 2006, and the demand-side economic indicators seem to agree with this assessment.
Asia is still a powerhouse and opportunities continue to abound in 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.
From a macroeconomic perspective, both China and India are poised for significant long-term growth. 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. As a result, ARC expects that China will be the single biggest geographical market for automation products and services in 20 years.
Strategic Issues
Manufacturing faces an impending crisis and while leading companies are taking action, many companies still are not. Some of the issues discussed in the study include:
- Shifting supplier market shares, where the top 3 suppliers have the same or slightly less market share due to an aggressive second tier of providers
- Control system migration challenges and opportunities in managing the transition to a modern DCS
- Minimizing planned downtime and avoiding unplanned downtime to avoid production loss, resulting in lost revenues or profits
- Changing workforce demographics, with an approaching mass exodus of skills from the industry and few young people wanting to take up the gauntlet.