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Difficult Year Closes on Global PLC Market

ControlDesign.com
02/16/2010

It’s been an extremely difficult year for most PLC suppliers. Global PLC revenues are estimated to have been 19% lower than they were in 2008. According to a published report from IMS Research (www.imsresearch.com), the world market for PLCs and directly associated software and services was estimated to have been worth $7,801 million in 2009. It is forecasted that the market will not recover to the 2008 level until the second half of 2012.

No region has been insulated from the effects of the economic downturn. Europe, the Middle East and Africa (EMEA), the largest market for PLCs, has been the most badly affected. The main factor behind this is that Germany, the most important market for PLCs in EMEA, suffered the largest contraction during the global recession. After a sharp fall in the German export business, improvement in activity is forecast to be slower than elsewhere, especially until the middle of 2010, according to IMS Research. Conversely, the 2009 market contraction was least marked in Asia; this market is forecast to grow the fastest from 2008 to 2013, with a revenue CAGR of 6%. This is due to improved prospects in China and India, in part reflecting substantial macroeconomic stimulus and a faster-than-expected turnaround in capital flows.

PLC revenues contracted painfully in almost all sectors of industry in 2009, according to the IMS report. However, a few markets were less affected by the economic downturn, including those like electrical power, transportation and water treatment supporting infrastructure development. These markets were largely helped by various government stimulus packages, which helped to create new demand for automation products such as PLCs. Sectors closely associated with consumer goods, such as food, beverage & tobacco machinery and packaging machinery, and a few emerging industries, such as renewable energy, also helped to sustain demand for PLC products. These industries are all forecast to grow globally over the period 2008–2013.

The consensus of many major PLC suppliers is that market recovery is expected to begin slowly in 2010, as government investment filters through to many more of the major discrete and process industries that use PLCs. However, recovery is unlikely to be V-shaped, and the coming year will remain challenging for the global PLC suppliers, according to IMS.