ARC Advisory Group Industry Market Update April 2025

To provide our Advisory Service clients with holistic coverage of the various industrial and automation markets we cover, ARC Advisory Group publishes indices of revenues from automation and machinery companies as well as indices of revenues and CapEx from end user industries on a quarterly basis. This report is concise and focuses more on the quantitative than the qualitative aspects of the automation, end user, and machinery industrial markets.

Global Automation Index: Raw vs. Seasonally Adjusted Data

• Per Q4 2024 results, global automation markets continued to see a slower growth same as in Q3 on YoY basis. Overall, the calendar year 2024 was resilient despite macro environment challenges. Normalization of backlogs, destocking, and strong declines in machine automation segments were some of the key inhibitors.
• Majority of the growth is driven by electrification, utilities and aerospace & defense projects. Process and hybrid industry markets continued to grow, while machine automation saw strong declines.
• Asia region was the key driver pulling the growth followed by the Americas markets.  The US was the key contributor in the Americas.   
• Overall, the year 2025 is expected to see a moderate growth and face challenges with increased costs on account of new tariffs and uncertainty in investments is expected due to new tariff policies.  

Americas

• Per Q4 2024, demand for automation products in Americas continued to expand and the market performed slightly better than Q3 on YoY basis.  
• The YoY growth cycle shows a marginal decline.  
• Growth was predominantly driven by electrification, water & wastewater, power generation, hydrogen, marine and ports, and data center segments.
• Discrete industry market segments started to see growth but still at low single-digits.

Europe

• The automation markets in Europe recorded an increase in Q4 2024 on YoY basis. Per Q4 2024 results, the YoY growth cycle points to slight rise of about 1 percent, after continuous declines in a row since Q2 2023.
• Investments in decarbonization, Industrial AI, electrification, energy and hydrogen, buildings, and data center projects continued to grow.
• Discrete automation segment saw strong declines on account of normalization of backlogs and destocking but expected to see a recovery late 2025.
• Strong demand from Middle East, Africa, the UAE, and India continued to support EU based automation companies

Asia

• The Asian market saw a growth of about 4 percent. The YoY growth cycle continued to decline with about 5 percent in Q4 2024. However, the growth trend points to a stable market.
• Large scale renewable energy projects and investments in power grid facilities, buildings, railways, substation equipment for power, and industrial led the growth. Also, strong demand from defense and aerospace sector.
• China started to see positive growth rates; sluggish Europe market also impacts Asia’s export business resulting in weak manufacturing activity. Increase in demand for smartphones and industrial machinery in China and capital expenditures mainly for artificial intelligence (AI)-related semiconductors in Japan, China and Taiwan.
• Japan: Robust CapEx in public utility systems and continued growth in power transmission and distribution outside Japan supported growth of Japanese vendors.
   

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