Keywords: Automation, Manufacturing, Discrete, Process.
The most recent ARC Automation Index, which tracks the overall health of the global automation industry based on reported supplier revenues, showed different developments in North America, Asia, and Europe.
In North America, the development in the last quarters continued on a positive track. Even the fiscal cliff in the US didn't appear to have a major negative impact on the overall development, despite some restraints for investing activities.
In Asia the picture was different. The overall automation index appeared to develop downwards, but this doesn't take into account the development of the Japanese Yen, as our index is measured in US dollars. Emerging Asia developed well over the last quarters indicating positive development in the future.
Europe's automation index remained flat over the last quarters indicating that the sovereign debt crisis still influenced automation investment behavior. Foreign direct investments were also held back due in part to the debt crisis and by the fact that energy prices in Europe are already high and keep increasing.
In this edition of the ARC Automation Index, ARC Advisory Group also examines the development of the ratio between earnings before interest and taxes (EBIT) and revenue in the three global regions. In North America, the EBIT/revenue ratio remained relatively stable over the last nine years. In contrast, Asia experienced very high fluctuations, with a negative EBIT/revenue ratio in 2009, indicated that the average Asian company lost ground during the recent economic crisis. Europe shows the lowest EBIT/revenue ratio, but the ratio increased over the last quarters and we expect this trend to continue.
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