Annual growth projected for automation products

The EMA (Europe, Middle East, and Africa) market for automation products and services for discrete Industries is expected to grow at a Compounded Annual Growth Rate (CAGR) of 6.6 per cent over the next five years.

This market was over $US8 billion in 2001 and is forecasted to reach over $US11 billion in 2006 according to a recently released ARC Advisory Group study.

The study notes that in Europe, manufacturers are continuing to be cautious as their economic strength declines. While the current slowdown in the world economy has severely impacted the industrial automation business in the EMA region, many bright spots are ahead with automation products and services for the discrete industries, the report says.

For example, high growth is projected for Eastern European and Nordic countries. Germany is the largest country for discrete products and services in the region and will also outpace the market growth rate, according to ARC's 'Total Automation Business for Discrete Industries EMA Outlook, Market Analysis & Forecast Through 2006.'

Many factors fuel growth
Advancement in technologies brings more functionality, ease of use, and lower cost to automation products and makes their adoption easier among users, according to ARC. Wide acceptance of the PC as an integration platform for HMI, logic solving, motion control, and vision systems make use of automation easier across the plant floor.

The report also says notes that progress in establishing networking standards, a single programming and diagnostic environment, and standards for data exchange facilitates integration of various automation elements in a consistent manner, further fuel the growth.

Automation is a key to survival
Users strongly believe that leading edge automation is the key to stay competitive. Users are under pressure for better quality products with more variety and quickly brought to the market at a lower cost. This, says the study, "translates into a need for better automation and greater flexibility, infusing new technologies and integration of plant floor to business processes. This situation will increase use of new automation products and services across many industries in the EMA region."

Fierce competition will continue
The Arc Advisory Group says that automation suppliers are facing special challenges to keep revenue growing while maintaining profit margins. The marketplace is fiercely competitive with declining revenues as prices keep plunging.

This study reveals how suppliers of each class of automation products face their own unique market characteristics and challenges for growth. The report discusses these characteristics and challenges, and recommends strategies to remain successful in this tough economic and market environments.

In terms of the areas covered, the study analysed market data of a broad spectrum of automation products, including Programmable Logic Controller (PLC), General Motion Control (GMC), Computer Numeric Control (CNC), AC Drives, Human Machine Interface (HMI), Operator Interface Terminal (OIT), Material Handling Control Systems Software (MHCS), and Collaborative Production Management (CPM), among others.