Chinese domestic consumption is expected to continue the country's strong economic growth as China continues to become more and more urbanized outside the major cities.

Source: IMS Research (acquired by IHS)http://www.controleng.com/typo3/clenear.gi

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IMS Research (IHS Inc.) believes that the Asia-Pacific PLC market (excluding Japan) will find a new driver of growth –Chinese domestic consumption, according to a new study The World Market for PLCs – 2012. 

Over the past three decades, China has delivered a veritable economic miracle, double-digit growth year after year. The twin engines of this economic machine have been exports and investment. China drew from these seemingly never-ending wells and happily watched its economy soar. Unfortunately, however, due to the current Eurozone sovereign debt crisis, a sputtering U.S. economy, and the global recession, China’s mighty economic machine has stalled. So, with export markets stagnant up and the government’s stimulus package (despite producing positive short-term effects) exacerbating inflation and overcapacity, expanding domestic consumption remains the only card the Chinese government has left to play.

“Now it is the right time for China shifting its growth engine to domestic consumption. The coming reform of the economic growth model offers PLC suppliers a great opportunity”, commented Jay Tang, author of the latest PLC report from IMS Research. “The industries related to urbanization and the people’s lives will be the new source of growth for PLCs.”

IMS Research predicts the industries in the Asia-Pacific PLC market that are related to domestic consumption will grow faster than the average from 2011 to 2016. 

Of the machine-builder sectors, food, beverage and tobacco machinery was estimated to account for the second most PLC revenues in 2011, $139.4 million; packaging machinery accounted for the third most, $127.7 million. This was largely due to the demand for processed and packaged food, with rising disposable incomes and increasing urbanization. IMS Research believes that the growth will be sustainable, and has forecast a sector compound annual growth rate (CAGR) of more than 10 percent, higher than the machine-builder average, from 2011 to 2016. 

The pharmaceuticals sector is forecast to be one of the fastest growing end-user sectors, with a revenue CAGR of 9.5 percent from 2011 to 2016. Growth in this sector is largely being driven by emerging economies, such as China and India. As it is closely tied to population, the accelerating process of population ageing and urbanization, this sector will maintain a healthy growth rate over the forecast period. 

IMS Research’s report The World Market for PLCs – 2012 was published in September and contains forecasts and analysis for this fast growing segment of the PLC market.