After the 2009 economic crisis, most PLC suppliers were pessimistic about their future businesses, figuring on recovery not happening until 2013. But global PLC revenues grew nearly 30% in 2010, reaching an estimated at $8.2 billion, and bringing business back to 2008 levels three years earlier than expected.
“Although the recovery was unexpected, it is not hard to explain,” said Alex Hong, market research analyst in IMS Research’s industrial factory automation group. “The demand for automation products in many ongoing projects stagnated when investment funding dried up in the economic downturn. However, government economic stimulus in several countries helped to make money more available at different levels of industry.”
PLC customers—mostly builders or users of industrial machinery—had more access to funding to purchase more PLCs and other automation products to continue with their projects. Both the restart of projects discontinued in 2009 and the start of new ones contributed to the high growth of the PLC market in 2010.
Growth continued in 2011, though at a slower rate than in 2010, and global PLC revenues have remained high. Markets varied according to region, however. In Europe, despite the continuing and worsening Eurozone sovereign debt crisis, the most important market for industrial automation products—Germany—continued to grow at a healthy rate. In the Americas, large projects from some end users and growing domestic demand enabled the PLC market to grow, though the market in Latin America is still underdeveloped. In Asia, the markets in the growing economies of China and India have performed quite well, but Japan’s market was hit by the consequences of the earthquake earlier in the year. In general, the growth of the global economy in 2011 underpinned the global growth of the PC market.
PLC suppliers and their industrial customers are uncertain whether growth will continue into 2012, considering the risks to the world economy. Many factors, such as Europe’s unresolved sovereign debt crisis, tightening economic policy in China, and the consequences of the earthquake in Japan and the recent floods in Thailand, are affecting the market.
However, IMS Research believes that the PLC market will continue to grow in 2012, mainly because many large and important PLC markets, such as Germany, France, China and the U.S., are still performing well at the turn of the year. In addition, emerging markets, such as Brazil and India, which already account for half the entire PLC market, will be the main driving force for future growth.