Hazardous area equipment sales decline due to oil and gas market
IHS reported that sales of hazardous area equipment declined by over 11% from 2014 to 2015 due to a decline in the oil and gas market.
Sales of hazardous area equipment declined by 11.1%, 2014 to 2015. Revenues are estimated to have fallen from $8.6 billion in 2014 to $7.7 billion in 2015, according to a recent IHS report. The report predicts that it will take until 2019 for world sales revenues to recover to their 2014 level. Figure 1 shows a comparison between the three major regions of the world from 2014 to 2020.
The report was compiled following consultations with major suppliers of equipment, standards authorities, and industry specialists. It covers many aspects of the industry and the markets it serves, as well as providing background information on the relevant legislation and approval bodies.
The underlying message is that it is the companies that supply the oil and gas, and related, industries that have suffered revenue declines. Most of the reduced revenues were from sales to up-stream operators in response to the forecast viability of some wells and to questions on the potential value of exploration.
The response to the fall in the price of oil was somewhat different from manufacturers supplying industries where oil is their raw material. They include the chemical, pharmaceutical, and plastics industries and even refineries. These industries suffered less; in some cases, their revenues even grew as their finished products became more competitive, resulting in increased revenues and profits.
John Morse is a senior analyst for industrial automation, at IHS Technology. IHS Technology is a CFE Media content partner. Edited by Chris Vavra, production editor, CFE Media, email@example.com.
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Original content can be found at Oil and Gas Engineering.