“UPS” and downs in backup power market

While it is customary to see sales decline in the first quarter of the new year as a result of the seasonal post-holiday slump, UPS sales were especially slow in 1Q 2012.

07/18/2012


IHS has acquired IMS ResearchWhile it is customary to see sales decline in the first quarter of the new year as a result of the seasonal post-holiday slump, UPS sales were especially slow in 1Q 2012, resulting in only 2% growth in the global market year-over-year. IMS Research (recently acquired by IHS Inc.) recently reported in its quarterly tracking of the global UPS market that UPS hardware revenue growth continued to slow after a rather sluggish second half of 2011. While little growth isn’t too surprising given the state of the global economy, the fact that large-system UPS sales dropped 2% year-over-year this quarter only provides further evidence of the struggles that the market will face in 2012.

After a rather upbeat beginning to 2011 in UPS sales, Western Europe still faced a struggling economy and overly cautious consumers because of the unresolved economic problems of Greece, Spain, and Portugal. As a result, the region’s sales began dropping off as early as 3Q 2011 and continued to shrink in the first quarter 2012. Single-phase sales fell 5% and the >100 kVA market contracted more than 15% year-over-year. IMS Research’s senior analyst Lori Lewis explained: “The ongoing struggle in Western Europe has really forced many in the region to restrain from making any kind of large financial decisions and to suspend purchasing new UPS. What’s even more troubling is that the market doesn’t appear to be turning around any time soon without any kind of resolution on the underlying economy. Adding further to the woes of Europe, Middle East, and Africa (EMEA), the emerging markets in both Africa and the Middle East, where hopes of UPS market growth were high, also fell short of seeing growth in 2011 over 2010.”

After experiencing a less-than-average 5% year-over-year growth in 4Q 2011, Asia’s sales continued to remain slow in 2012 with just under 9% growth year-over-year in the first quarter. China’s struggles intensified as interest rates climbed and lending froze; resulting in declining >100 kVA UPS sales. Lewis revealed: “The Chinese Government’s attempt to control an overheating economy by raising interest rates came at a time when the global economy was cooling off as pre-recession pent-up demand was satisfied. Slowing exports to Europe combined with the difficulties securing the financing needed for businesses to buy equipment had a dramatic impact on China’s growth. Now, China is dealing with slowing exports and limited growth to internal consumption that is needed to keep the country’s GDP growing.”

Japan’s growth also slowed after experiencing a dramatic pick-up in the single-phase market shortly after the tsunami in March 2011 hit. Meanwhile, other regions dependent on China have also felt the impact of China’s increased labor costs and slowing economy with little growth as well.

With economic struggles of its own, the U.S. has managed to keep sales moving in the positive direction at just under 5% year-over-year growth in 1Q 2012. The 10 kVA to 100 kVA range contributed to most of this, thought to be the result of increased demand for digitizing everything from programs and processes to information once available only as hard copy. The >100 kVA market remained steady continuing to pick up data-center projects; while the single-phase UPS sales remained flat. Further emphasizing the state of the economy, Brazil’s rapid growth even simmered down after its tremendous 2010. Even though a slowdown was expected because of worries from over saturating the market, the 5% annual growth seen in 2011 was anything but impressive for this promising BRIC country.

“Ever since the recession hit, the UPS market has been on a roller-coaster ride of ups and downs,” stated Lewis. “After making the climb to recovery in 2010 and part of 2011, sales have unfortunately headed back downhill and are forecasted to stay on that path until the issues weighing on Europe, China, and the U.S. are resolved.”

With two consecutive quarters of slow-to-no growth, the UPS hardware market will to continue to struggle for much of 2012.

IMS Research regularly analyses all aspects of the data center infrastructure market. More information regarding these detailed reports can be found here.



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.
June 2018
2018 Lubrication Guide, Motor and maintenance management, Control system migration
May 2018
Electrical standards, robots and Lean manufacturing, and how an aluminum packaging plant is helping community growth.
April 2018
2017 Product of the Year winners, retrofitting a press, IMTS and Hannover Messe preview, natural refrigerants, testing steam traps
June 2018
Machine learning, produced water benefits, programming cavity pumps
April 2018
ROVs, rigs, and the real time; wellsite valve manifolds; AI on a chip; analytics use for pipelines
February 2018
Focus on power systems, process safety, electrical and power systems, edge computing in the oil & gas industry
Spring 2018
Burners for heat-treating furnaces, CHP, dryers, gas humidification, and more
April 2018
Implementing a DCS, stepper motors, intelligent motion control, remote monitoring of irrigation systems
February 2018
Setting internal automation standards

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.
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.
Maintenance & Safety
The maintenance journey has been a long, slow trek for most manufacturers and has gone from preventive maintenance to predictive maintenance.
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.
click me