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Global PLC Market Coasts to 2016

ControlDesign.com
01/02/2013

Your view of the PLC world might depend largely on where in the world you view it, but in general, growth is slowing down from the levels they saw in 2010 and 2011 because of a variety of economic influences around the globe.

Coming on the strongest in the coming years will likely be Asia-Pacific (excluding Japan), where—spurred on by China, which accounts for more than half the market—PLC revenues are forecast to reach $3.6 billion by 2016, according to the latest numbers from IMS Research.

After a boom year of more than 50% growth in 2010, Asia-Pacific’s PLC revenues grew just 8.6% in 2011, due primarily to weakening external demand and the tightening monetary and fiscal policy against inflation. Growth in China appears to be stabilizing as government stimulus measures take hold, and industrial production, merchandise exports and real retail sales all appear to be growing faster. Exports, however, are expected to remain vulnerable for some time to come.

Despite challenges, IMS Research predicts that the long-term opportunities for the Asia-Pacific market remain strong, especially in China and India. China accounted for an estimated for 52% percent of the revenues in the region in 2011. India followed at almost 19%, a share that is forecast to grow more slowly than China’s.

“Although the growth rate of the Asia-Pacific PLC market has decreased to 7%, in IMS Research’s forecast, it was still projected to grow fastest of the regions over the next five years,” said Jay Tang, analyst, control and visualization, for IMS Research and author of the report, The World Market for PLCs—2012. “The compound annual growth rate from 2011 to 2016 will come back to 8.8%. By 2016, the Asian market is predicted to reach $3.6 billion, the second largest in the world.”

The largest market for PLC hardware and directly associated software and services remains Europe, Middle East and Africa (EMEA), whose size was estimated at $4.2 billion in 2011. That represents a growth of more than 23% over 2010, but the market is expected to see much slower growth this year, mainly because of the Eurozone debt crisis. From 2010 to 2016, EMEA’s PLC market is forecast to grow at a CAGR of 7.8%.

The American PLC market peaked earlier, showing a strong recovery in 2010 and then entering a period of modest growth. Thanks to domestic spending, economic performance in the U.S. has gradually been recovering throughout 2012, as indicated by several consecutive positive announcements relating to employment figures. The market in the Americas is projected to continue to grow at a modest rate from 2012 to 2016.

Japan’s post-earthquake recovery and reconstruction boom has stopped, causing a similar situation as seen in the Americas. Having increased by 30% in U.S. dollars in 2010, growth of Japanese PLC revenues slowed to an estimated 9.6% in 2011. The slowdown is largely due to tepid private domestic demand and significant headwinds for exports, including China’s anticipated growth moderation, the yen’s excessive strength, and the Japanese government’s overextended balance sheet.