Hazardous Area Equipment Sales Predicted to Drop in 2013

April 22, 2013
IMS Research Report Shows EMEA Region Growth Is Half of What Was Estimated in 2012

Hazardous area equipment sales in 2013 for the Europe-Middle East-Africa (EMEA) region are growing by less than half of what was forecasted in 2012.

A new estimated revenue of €2.67 billion (5.2%) is instead predicted to be reached this year, according to a report from IMS Research, but 2014 and beyond will have more stabilized growth.

By 2014, sales revenue is supposed to reach €2.91 billion, an 8.9% increase. By 2016, it is estimated to reach €3.4 billion. Unit shipments are predicted to grow at a more rapid rate, contributing to overall price pressure.

According to John Morse, senior analyst for discrete automation and author of the IMS report, capital expenditure in the oil and gas industry is a key influencer to the growth of the hazardous area equipment market. "Not all orders for any specific project are issued the moment a project is awarded. Orders are scheduled throughout the build, and so have the effect of delaying and smoothing out the demand pattern."

"The factors influencing the predicted decline in EMEA growth became clear from interviews conducted during research for the report," said Morse. "During 2011 and 2012, uncertainty of the euro, the troubled economies of some EU countries and political unrest in parts of the Middle East and North Africa, all resulted in projects being temporarily put on hold. Such factors were forecast to affect orders in 2013, when those projects would normally be in progress."

Despite the decline this year in revenue sales of equipment for EMEA, regions long-term growth is promising. There was no actual change in the euro's value, nor did any economical unrest affect revenue.

Any project that was put on halt in 2012 is expected to continue this year, and will make up the lost revenue from 2014 to 2016.