Strong growth potential in the industrial hydraulics sector

Global revenues for the industrial hydraulics market are expected to exceed $10 billion by 2013, which is a growth of 30% from 2010's revenues.

12/02/2011


The industrial market for hydraulic components is generally perceived to be a small, low growth portion of the global hydraulics market. However, the study released last month showed that global revenues reached almost $8 billion in 2010 and that this is expected to grow to exceed $10 billion in 2013. This represents growth of over 30% in three years. This is not low growth, and the statistics suggest that these additional revenues are not necessarily earmarked for the three leading hydraulics suppliers.

The high growth expected in the market at first looks surprising considering that hydraulics is a traditional technology, and competition from more fashionable alternatives such as electronics is limiting growth to levels below that of general industry. However, sustained market recovery during 2011 alone resulted in almost 14% revenue growth. Then on top of this, there is a rapidly expanding market base in Asia Pacific, and high levels of investment expected globally in oil, gas and mining projects in 2012. Thus by 2013, global market revenues are expected to be $2.3 billion larger than 2010. This is a substantial amount of revenue, and analysis of global share shows that it isn’t necessarily going to fall into the hands of the leading 3 hydraulics suppliers. While it is generally perceived that Bosch Rexroth, Parker Hannifin, and Eaton dominate the global market for industrial hydraulics, the report shows that these companies collectively accounted for less than 50% of global revenues for pumps, motors, cylinders and valves in 2010. This left over $4 billion accounted for by companies that all had less than 3.5% share. This is good news in the sense that it shows this show’s that these companies do not dominate supply to an exclusive degree. However, also highlights the potential difficulty for companies targeting high growth in this area.

This fragmented share is thought to be a result of the large number of low volume, localized contracts that constitute the industrial market. In fact, this is why many hydraulics suppliers have deliberately chosen to avoid the industrial sector altogether, focusing predominantly on the mobile sector where high volume contracts are available. This highlights that growth in the industrial hydraulics market would be incremental and take significant investment of both time and resource to accrue the high number of new customers required to increase sales substantially.

Profile photo of Robert Carter, a principal analyst for IMS Research who specializes in the power transmission. Courtesy: IMS ResearchHowever, this also leads us onto the positive. In this period of economic uncertainty, manufacturers of all types of automation components are attempting to diversify the market sectors they address in order to limit dependency on any particular one. It is the strategic marketing equivalent of increasing the number of ‘baskets’ in which to carry ones ‘eggs’. Pursuing growth in the industrial sector of the hydraulics market would heavily encourage this type of growth model, effectively acting as its own insurance.

So considering this, it would appear that targeting growth in the global industrial hydraulics sector, is not just feasible, but also quite an attractive option for suppliers to consider, should they have the required time and resource available.



Top Plant
The Top Plant program honors outstanding manufacturing facilities in North America.
Product of the Year
The Product of the Year program recognizes products newly released in the manufacturing industries.
System Integrator of the Year
Each year, a panel of Control Engineering and Plant Engineering editors and industry expert judges select the System Integrator of the Year Award winners in three categories.
October 2018
Tools vs. sensors, functional safety, compressor rental, an operational network of maintenance and safety
September 2018
2018 Engineering Leaders under 40, Women in Engineering, Six ways to reduce waste in manufacturing, and Four robot implementation challenges.
July/Aug
GAMS preview, 2018 Mid-Year Report, EAM and Safety
October 2018
2018 Product of the Year; Subsurface data methodologies; Digital twins; Well lifecycle data
August 2018
SCADA standardization, capital expenditures, data-driven drilling and execution
June 2018
Machine learning, produced water benefits, programming cavity pumps
Spring 2018
Burners for heat-treating furnaces, CHP, dryers, gas humidification, and more
October 2018
Complex upgrades for system integrators; Process control safety and compliance
September 2018
Effective process analytics; Four reasons why LTE networks are not IIoT ready

Annual Salary Survey

After two years of economic concerns, manufacturing leaders once again have homed in on the single biggest issue facing their operations:

It's the workers—or more specifically, the lack of workers.

The 2017 Plant Engineering Salary Survey looks at not just what plant managers make, but what they think. As they look across their plants today, plant managers say they don’t have the operational depth to take on the new technologies and new challenges of global manufacturing.

Read more: 2017 Salary Survey

The Maintenance and Reliability Coach's blog
Maintenance and reliability tips and best practices from the maintenance and reliability coaches at Allied Reliability Group.
One Voice for Manufacturing
The One Voice for Manufacturing blog reports on federal public policy issues impacting the manufacturing sector. One Voice is a joint effort by the National Tooling and Machining...
The Maintenance and Reliability Professionals Blog
The Society for Maintenance and Reliability Professionals an organization devoted...
Machine Safety
Join this ongoing discussion of machine guarding topics, including solutions assessments, regulatory compliance, gap analysis...
Research Analyst Blog
IMS Research, recently acquired by IHS Inc., is a leading independent supplier of market research and consultancy to the global electronics industry.
Marshall on Maintenance
Maintenance is not optional in manufacturing. It’s a profit center, driving productivity and uptime while reducing overall repair costs.
Lachance on CMMS
The Lachance on CMMS blog is about current maintenance topics. Blogger Paul Lachance is president and chief technology officer for Smartware Group.
Material Handling
This digital report explains how everything from conveyors and robots to automatic picking systems and digital orders have evolved to keep pace with the speed of change in the supply chain.
Electrical Safety Update
This digital report explains how plant engineers need to take greater care when it comes to electrical safety incidents on the plant floor.
IIoT: Machines, Equipment, & Asset Management
Articles in this digital report highlight technologies that enable Industrial Internet of Things, IIoT-related products and strategies.
Randy Steele
Maintenance Manager; California Oils Corp.
Matthew J. Woo, PE, RCDD, LEED AP BD+C
Associate, Electrical Engineering; Wood Harbinger
Randy Oliver
Control Systems Engineer; Robert Bosch Corp.
Data Centers: Impacts of Climate and Cooling Technology
This course focuses on climate analysis, appropriateness of cooling system selection, and combining cooling systems.
Safety First: Arc Flash 101
This course will help identify and reveal electrical hazards and identify the solutions to implementing and maintaining a safe work environment.
Critical Power: Hospital Electrical Systems
This course explains how maintaining power and communication systems through emergency power-generation systems is critical.
Design of Safe and Reliable Hydraulic Systems for Subsea Applications
This eGuide explains how the operation of hydraulic systems for subsea applications requires the user to consider additional aspects because of the unique conditions that apply to the setting
click me