AUTOMATION INDEX Q2 2018

By Florian Güldner

Category:
ARC Report Abstract

Executive Overview

Automation markets have demonstrated significant volatility over the last two years.  Initially, process industries struggled, while discrete industries developed well.  We also saw different developments across regions: China experienced a dramatic reduction in automation investments, followed by a tremendous boom; while Europe and North America remained relatively stable overall. 

Now, we’re at a turning point in the market developments, with a weakening across discrete automation markets and accelerating growth on the process automation side. 

Automation markets Automation-Icon-Black-Text-copy.pngFor market participants, these trends are increasingly important.  If they rely too heavily on any single vertical market, even large automation sup-pliers could experience dramatic shifts in their businesses.  Also, companies often allow short-term thinking and measures to override long-term strategy.  This often leads to expensive M&A activities at the height of a cycle; and drastic cost-cutting measures in market downturns that can make it difficult to capitalize on opportunities when market growth returns. 

In today’s environment, as new business models emerge, it is increasingly important for automation suppliers and OEMs to develop and stick to a long-term strategy.

Automation Markets

Overall, automation markets should remain in good shape for the rest of 2018 and the outlook until the first half of 2019 is positive.  Beyond that, investments in automation will be strongly industry-dependent; some industries will grow, others will stabilize or even shrink.  In general:

  • Process industries are accelerating
  • Discrete industries are stabilizing right now
  • Japanese market is already contracting in selected product markets
  • Chinese market pushed automation demand throughout 2017/2018
  • Business cycle in Europe and North America has also been positive
  • Political climate adds uncertainty and slows down long-term investments

 

Contents

  • Executive Overview
  • Automation Market Developments
  • Different Implications from CapEx Development and Machinery Sector
  • Selected Industry Cases
  • Recommendations

 

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