Steady Gain for Supplier Revenues in Q3 2011

Keywords: Automation, Quarterly Supplier Results, Asia-Pacific, Europe, Middle East & Africa, Latin America, North America, Sovereign Debt Crisis.

Automation suppliers continued to see strong revenue growth in the third quarter of 2011, though the delta was slightly smaller than in the previous quarter. Manufacturers continue to increase production capacity and efficiency, with rising energy prices driving activity in the oil & gas sector. Power and infrastructure projects continue to generate business, particularly in China and India. Order books are still quite full, which may help insulate automation suppliers from any economic repercussions from the sovereign debt crisis in Europe and slow growth in the United States. Greenfield plant construction in Asia, along with continued infrastructure development, will be a source of new business for suppliers, as long as the economic troubles in Europe and North America do not spread.

Analysis
Revenues and profits of the major automation suppliers continued to grow during the third quarter of 2011. Suppliers to the discrete industries still saw strong revenue growth as the automotive and semiconductor industries work to re-establish themselves in developed regions, while embarking on new plant construction in emerging markets. Process industry suppliers also saw strong year-on-year growth and reported strong order activity, particularly in the energy sector. While Q3 2011 was another strong quarter for automation suppliers, there is much uncertainty about prospects for growth in the future, particularly in Europe, where the sovereign debt crisis could jeopardize the economic health of the region.

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