Low-power AC drives continue global growth

Edited by the Engineeringtalk editorial team Jul 2, 2008

The worldwide market for low-power AC drives is predicted to grow at a compounded annual growth rate of 8.9% over the next five years.

Strong growth continued in 2007 for the low-power AC drives market due to robust investments in manufacturing and infrastructure industries worldwide.

The worldwide market for low-power AC drives is expected to grow at a compounded annual growth rate of 8.9% over the next five years.

The market was over US $7 billion in 2007 and is forecasted to be nearly $11 billion in 2012, according to a new ARC Advisory Group study.

Emerging economies, such as those in the BRIC countries (Brazil, Russia, India and China) and Eastern Europe, helped propel this growth.

The regional expansion was led by China, where real GDP grew robustly as exports and investment accelerated, and by India, where gains in domestic demand and particularly investment underpinned strong growth.

"Increasing consumer demand from the growing middle class in emerging economies, new infrastructures, a friendly financial environment for capital investments, and a need for producing and saving energy were primary factors for huge market growth", according to Senior Analyst Himanshu Shah, the principal author of ARC's "Low-power AC drive worldwide outlook, market analysis and forecast through 2012".

Despite a softening US economy, automation suppliers continued to post strong revenue growth in the fourth quarter of 2007, propelled by robust green-field plant construction in developing regions and strong project activity in the oil and gas sector.

Suppliers reported big project wins in the oil and gas, refining, petrochemical, and mining sectors.

Significant order backlogs ensure that business will continue at a healthy pace.

Although the North American market may face some economic challenges in the quarters ahead, demand for automation products will remain strong, thanks to much needed modernisation of the industrial infrastructure that is well under way.

Demand side conditions in the automation marketplace remained strong, with continued heavy investment in China, India, Latin America, Eastern Europe, and the Middle East.

The oil and gas industry remains the leading growth industry for automation.

Globalisation has created huge demand for modern infrastructure, especially in emerging economies.

Globalisation is also driving the use of advanced automation worldwide.

Consequently, AC drives are increasingly used across all industrial segments, including building automation, chemicals, food and beverage, textiles, metals, and various infrastructure industries.

Energy scarcity in comparison to supply is also affecting automation in a wide range of industries.

For example, the automotive industry seeks lighter material to improve fuel efficiency and the packaging industry seeks more paper materials to reduce packing material cost, which are driven up by high energy cost.

These changes also fuel new ways of manufacturing operations, causing additional use of automation equipment.

Although every world region will experience growth in the low-power AC drives market over the forecast period, there are significantly different factors affecting this market growth across world areas.

A brief description regarding the economic scenarios for each major world area is covered in the report.

In addition to the quantitative assessment of the low-power AC Drive market, the report provides an insightful analysis of the market and strategies of leading suppliers that will impact this business in the future.