While stagnation, debt crises, an aging society, and engineering shortages in Europe create vexing structural problems, an emerging Asia will recover more quickly to become the largest PLC market from 2016 onwards, according to "PLC and PLC-based PAC Global Market Research Study" by ARC Research.
This development is driven by demand in China and the emerging Asian market, which will continue to grow at above average rates. In addition to Japan, now China, Korea, and Taiwan have established themselves as part of the global machinery market. These markets will also shift towards more high-end automation, developing more sophisticated machinery for export.
"Manufacturing Renaissance, Industry 4.0, and re-shoring are trends that describe the future return of manufacturing in developed markets," reports analyst and principal author Florian Güldner. "However, future development will prove whether this is wishful thinking, or if manufacturing and automation will reemerge in developed nations."
Reshoring describes the process by which manufacturing returns to developed nations, having previously outsourced and offshored manufacturing to countries with lower wages, such as Eastern Europe and emerging Asia. In some areas, ARC sees this trend carrying large potential, especially for industries that need to react quickly to changing consumer preferences. The reshored industries will automate larger parts of production to counteract the wage structure in developed countries. In the long run, ARC expects this to have a slight positive impact on market development.
The report says the increased degree of automation in reshored markets "will demand PLCs that support information-driven manufacturing, linking the plant floor to MES and ERP layers and — in some cases — directly to the consumer. In addition, PLCs need to handle large amounts of data, feeding them back to higher-level systems. The results are self-optimizing cyber-physical systems and modular plants and factories."
PLCs now integrate safety and cybersecurity, but will also need to integrate energy management, analytics, and other functions.
A manufacturing renaissance is driven by the need to react to consumer demand. The largest volume of consumers is still in Europe, Japan and North America. However, say the analysts, the increasing wealth in emerging economies and the rising urban middle class lowers the incentives to shift manufacturing back as long as transportation costs and time are manageable. In ARC's view, this development will further push the PLC to emerging Asia.