Asia-Pacific leads temperature controller market

A market study finds that the Asia-Pacific industrial electronic temperature controller market is not only the largest of the major regions, but is also the fastest growing.

A market study by Venture Development Corporation finds that the Asia-Pacific industrial electronic temperature controller market is not only the largest of the major regions, but is also the fastest growing.

Growth in the worldwide market for industrial electronic controllers has been slowing in recent years as the implementation of temperature control loops are being instead incorporated into distributed control systems (DCSs), personal computers (PCs) and programmable logic controllers (PLCs).

VDC found the worldwide market of industrial electronic temperature controllers grew 3.6% in 2003, 3.5% in 2004, and 2.5% in 2005.

The company projects the worldwide market will grow only 1.2% in 2006, and forecast the compound annual growth rate (CAGR) through 2010 will be only 0.7%.

The European and North American markets have been and are expected to be the most severely impacted by this trend.

Both these large regional markets are expected to decline through 2010.

However, growth is still forecast for the Asia-Pacific market, and also the much smaller markets in Latin America and Rest of the World.

The emergence of China as a major manufacturing centre and market will be a driving factor behind this growth.

OEMs as well as many end-user industries are beginning to relocate to mainland China to take advantage of low-cost labour and materials.

The recovery of Japan's economy also is pushing the region out of a stagnant period of growth.

The shifting of manufacturing operations by OEMs and companies in major end-user industries to China, along with declining prices for temperature controllers are the primary reasons for the declining European and North American market forecasts.

Both these markets are very mature, so that there is little room for growth of new industries or firms to offset the exiting OEMs and other manufacturers.

In addition, many industrial electronic temperature controller suppliers based in Europe and North America have indicated that if they haven't already they will soon be opening their own manufacturing operations in China.

By manufacturing in China suppliers are not only able to gain the competitive advantage of cheaper labour and materials, but they are also moving closer to the major growth markets.

The small Latin American market is expected to experience the highest rate of growth through 2010 (CAGR of 4.8%) as the region continues to automate during the emergence of many economies in the region.

Growth in shipments to the Rest of the World is expected to be slow at a CAGR of 0.9%, due to a slower influx of capital investment.

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