ARC Advisory Group Market Update March 2021​

Introduction

To be able to provide our Advisory Service clients with holistic coverage of the impacts of the COVID-19 pandemic on various markets, ARC Advisory Group has decided to publish our latest Automation Index as a Special Report in PowerPoint format.  This concise report focuses on the quantitative rather than qualitative aspects.

We have adopted our CapEx calculations to line up with the automation indices, but this did not result in significant changes to the overall dynamics.

Automation Markets

Automation Index: Raw vs. Seasonally Adjusted Data ​

• Automation market has been experiencing a downturn since mid-2019, before the Covid-19 pandemic began. Then, the pandemic hit the market hard, resulting in a decline of about 15 percent in revenues in Q2 2020.​
• It appears that most of the global automation markets started experiencing a recovery from Q3 2020, although the impact of the second wave of the pandemic has been much worse than the first in terms of fatality.​
• In Q4 2020, most of the global automation markets rebounded, but the rebound varied across regions. Direction of the index for Q4 shows an upward trend for both raw and seasonally adjusted data compared with Q3 2020. Generally, Q4 tends to be a good growth quarter, this could be due to business cycle trend.  Also, businesses and people have started adjusting to the “new normal” lifestyles with safety measures mandated by COVID-19. ​
• ARC sees less volatility than in 2008/2009 and believes that going forward, the impact of COVID-19 on automation markets should not be as severe as in Q2 2020.​

Americas

• In the Americas, the raw index shows that quarterly YoY development has been negative since Q1 2020.  It was negative in the first two quarters of the year 2019. However, Q4 data shows an upward trend after three quarters of contraction. ​
• The upward trend was mainly due to the business cycle. Also, demand from water & wastewater, pulp & paper, food & beverage, and metals improved slightly in Q4 2020.​
• Aerospace and oil & gas industries are still under slowdown due to less industrial and flight traffic and no new investments, but defense looks relatively stable.​

Table of Contents

• Automation Markets: Including regional market development, hardware/software market development​

• Sentiment Index​: Monthly market tracker​

• Corona Mutations​: A brief non-medical overview​

• End User Markets​: An excerpt from our CapEx and revenue index​

• Mining Deep Dive​: Brief outlook on the years to come in the mining industry​

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