2009 looks like a slow year for capital spending in many manufacturing plants, and that's bad news for many in the automation industry. But money will still be spent in other areas, primarily from maintenance and plant operations budgets.
In good times, many plant owners defer maintenance and upgrade projects for three reasons.
One, the plants are running full out to meet demanding production schedules. This leaves no time to implement upgrades. Employees are busy keeping the plant running at full capacity - and simply don't have time to define, bid, and install new machines.
Two, plants simply cannot be shutdown to install upgrades because all capacity is needed.
Three, many plants have major capital projects on the near horizon and don't want to invest money upgrading older plant areas.
This all changes in lean times. Plants can now run at reduced capacity and still meet demand. This creates more time for employees to evaluate and implement upgrades. The downtime required to implement many upgrades is now available.
With few major capital projects on the horizon, plant managers know that they will have to invest in current assets in order to keep them up and running for years to come.
This means that many more existing machines will be upgraded to extend their operating life, and most of these upgrades will include improvements to or replacement of machine automation systems.
As a machine builder, are you seeing this trend among your customer base?