ARC Automation Index: Market Dips in Q2 2011, but Rebounds in Q3

Keywords: Automation Index, Automation Markets, Scenario-Based Forecasting, Chained Index.

The Index — A Short Introduction to ARC's Approach
This is the fourth installment of ARC Advisory Group's quarterly Automation Index. As we continue to improve our database, we have increased the number of companies included in the index. ARC bases the index on public data of major automation companies, including published revenues. The index itself is a chained index and represents the weighted sum in growth rates. ARC's methodology is based on a Paasche Index, which calculates the growth from one period to the next based on the data available in the initial period. Each vendor is included within its region of origin. For a more detailed view on our methodology, please see our March 25, 2010 insight.

Changes and Improvements
We made no methodological improvements this time, but added several companies to the Asian Index, including Adlink, Advantech, and Evoc. The Asian Index now contains fourteen companies and represents approximately 29 percent of the global automation index.

To increase the value of this Automation Index as a short-term planning instrument, we introduced scenarios. This is the third iteration that in-cludes scenario-based forecasting. The straightforward scenario methodology is based on standard methodology, modified by ARC.

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