What did we learn about the business cycle From SPS/IPC/Drives in 2011?

Factory automation insiders believe, in spite of recent economic troubles in Europe, that the FA industry will remain strong, though perhaps growth may be reduced.

12/19/2011


The two main factory automation (FA) shows of the year, SPS and Hannover, provide an excellent opportunity to gauge industry momentum at two fairly evenly separated points of the year. The most recent one, SPS Nürnberg, didn’t disappoint. The organizers, Mesago, boasted substantial visitor and exhibitor growth compared with 2010, and this was evident from walking around. IMS Research attended with over 20 dedicated FA analysts, underlying our commitment to the show.

While our analysts met with a diverse array of attendees and exhibitors from around the world, our conversations were inevitably drawn to the economic and political events currently taking place in Europe. My concern going was that our discussions would highlight industry growth for FA equipment is entering a notable slowdown, and even worse, that this could be a precursor for another contraction. General sentiment, however, alleviated this concern (at least for now). Discussions regarding future order books suggested a softening in the fourth quarter, after what has been three very strong quarters of growth for FA equipment during 2011. Further, while most conversations about 2012 contained caveats in case of a possible Euro melt-down, in general people were projecting growth for 2012, if not somewhat moderated, versus what has been an extraordinary growth year for FA equipment in 2011. One vendor summed it up quite well “what we’re reading in the newspapers doesn’t correlate with what we’re seeing in our order books”.

If one examines revenues reported by publicly operated automation equipment entities as we do as part of our IAEE report, we can see that revenues for European-based vendors on a quarter-to-quarter basis actually contracted during the third quarter. The quarterly signal (the blue series in the accompanying chart) is a noisy one, and really the rolling annual average presents a better barometer of where we are. Clearly revenues peaked in the second quarter, but the last four quarters were 16.7% improved over the equivalent timeframe a year earlier. This doesn’t provide us the forward looking information we’d really like to have, but if one factors in the insight discussed above, a soft fourth quarter followed by a moderated growth profile would represent good news for automation equipment vendors. What is our current forecast for 2012? 10.2% in Europe and 12.1% globally. An upcoming blog authored by our machinery production expert Andrew Robertson should add some insight to our position.

Graph highlighting the Industrial Automation Electronic Equipment (IAEE) Automation Index from 1Q 2009 to 3Q 2011. Courtesy: IMS Research



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