Demand for hydraulic equipment set to rise

Latest findings unveiled by Frost and Sullivan peg total revenues in the European hydraulic equipment market at $5.55 billion in 2000, predicted to climb to $6.66 billion in 2006

The power and reliability of hydraulic systems, coupled with the low associated operating cost, provides end-users with unrivalled manufacturing capabilities for numerous applications.

Latest findings unveiled by Frost and Sullivan, the international marketing consulting company, peg total revenues in the European hydraulic equipment market at $5.55 billion in 2000, predicted to climb to $6.66 billion in 2006.

In order to comply with heightened demand amongst end-users for improved system performance, the trend towards integrating electronics into hydraulic systems is intensifying.

Brian Flannery, Industry Analyst at Frost and Sullivan, points out: "Electronics are performing a crucial role in many hydraulic applications, enhancing accuracy and control within the system operation.

Advancements in operability and user-friendliness facilitated through electronics is set to galvanise sales in the overall market." Developments in the market include the trend toward integrating electronics into the control aspects of hydraulics, allowing hydraulic systems to remain competitive with other forms of motion control.

A major contributor to the robust growth rates which typify the overall hydraulics industry is the boom in the mobile sector, particularly in earthmoving and construction machinery, where demand for hydraulic equipment continues unabated.

Frost and Sullivan's study identifies a significant level of replacement and upgrade activity in the overall market.

Furthermore, improved economic conditions throughout Europe, rising levels of innovations and new investment programmes across a range of end-user applications are set to unleash heightened demand for hydraulics.

Competitive pressures are growing fiercer, but key technological developments, combined with lower prices and continuing investment from user sectors, are all projected to stimulate sales.

Topping the hydraulics expenditure league is the pumps and motors sector.

Growth in this sector in recent years has been powered by service improvements and product developments.

Technological developments in the field of noise levels and increased performance levels are likely to sustain interest.

Meanwhile, the valves sector is characterised by the rising uptake of electronics.

Electronics has already contributed to major design improvements and current developments are almost entirely focused around this area.

Technology has become more compact and costs for valves incorporating electronics are now far more competitive.

The European market for hydraulic equipment is served by a diverse range of competitors.

Business is divided into three primary tiers.

The first tier consists of large international competitors offering a wide product range and covering a broad series of application areas.

Robert McNally, Research Analyst at Frost and Sullivan and the study's co-author, comments: "Rexroth has taken a healthy grip on the European hydraulics equipment market and continues to retain its market leadership status.

The company's ability to serve a broad range of end-users in both mobile and industrial sectors is an important step in Rexroth's ascent to the top of the total hydraulic equipment market." Parker, demonstrating vested interest in the mobile sectors such as earthmoving and construction and agricultural, sectors ranks in second position.

A second, and increasingly active tier of competitors consists of medium-sized operations that are expanding their business to cover a wider range of products, applications and regions.

Niche markets have frequently been the preserve of small specialist manufacturers, which represent the third tier.

In order to steadily fortify their presence in the European hydraulic equipment industry, market contenders have been embarking on a mergers, acquisitions and partnership drive.

Frost and Sullivan expects the trend towards consolidation to continue in future as manufacturers strive to globalise their operations further and to cut themselves a larger slice of this growing market in a highly competitive climate.

Frost and Sullivan is an international marketing consulting company that monitors a comprehensive spectrum of industrial power transmission markets for trends, market measurements and strategies.

This ongoing research is utilised to complement a series of research publications to support industry participants with customised consulting needs.

Free executive summaries of all Frost and Sullivan reports are available to the press.

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