The Automation Expenditures for Discrete Industries market rebounded in 2010 after recovering from a deep global downturn in 2009. 2010 started out with sluggish order activity, which later escalated, resulting in a recovery in 2010 that was more robust than expected earlier in the year. Emerging economies, including the BRIC (Brazil, Russia, India, and China) countries, drove growth for the Automation Expenditure for Discrete Industries market in 2010, according to a new ARC Advisory Group study.
The second largest economy in the world, China, continues to be a growth driver for the overall automation business. Current activities reflect that China and India are still investing in automation. “Domestic demand will remain strong in emerging and developing economies. Consequently, the global automation systems market for discrete industries will experience moderate growth during the five year forecast period,” according to Senior Analyst Himanshu Shah, the principal author of ARC’s “Automation Expenditures for Discrete Industries Worldwide Outlook”.
Increasing Demand from World’s Rising Middle Class
Until recently, the world's middle class was located in Western Europe, North America, and Japan. Now a new global middle class is rising up from poverty in emerging economies around the world. The rapidly expanding middle class in Asia, Eastern Europe, and Latin America is creating tremendous consumer demand. This offers enormous promise for industries that provide their products and services to the burgeoning ranks of new consumers.
This new middle class is purchasing products across all segments, and more importantly, products are tailored to their tastes. The consumption is expected to grow in areas ranging from consumer electronics to automobiles to food and beverages. As a result, a number of industries will benefit, which will generate demand for more automation.
The demand for items such as automobiles has already grown, resulting in new local factories and increases in capacity at the existing production facilities. Global automotive manufacturers that set up plants in Asia are held to the same high standards of production and quality as they are in the developed economies. The automotive industry will have a sustained demand for automation over the next several years.
Despite the overall positive forecast for the automation expenditure in discrete industries market, risk remains due to many factors. High oil prices due to growing demand from emerging nations and continuing political turmoil in the Middle East could upset growth. US unemployment rates continue to be a deterring factor, as does the European debt crisis. While it appears that growth will continue throughout 2011 and beyond, the growth rate will not reach the levels achieved before the last recession.
The report also addresses challenges faced by suppliers in this market turmoil. Diversified suppliers that focus on the infrastructure and process industries were in better shape to withstand this downturn compared to those that focus mostly on some of the discrete industries.
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