- November 20, 2019
- White Paper
By Tim Dawson, Research Director for Industrial Automation, Interact Analysis
With the manufacturing sector facing a bleak outlook in 2019, we thought it prudent to share our projections for the growth and development of the programmable logic controller (PLCs) market in key countries and industries, calling out specific bright spots and those set to suffer more deeply.
Three graphics present the following information:
- Figure 1 illustrates the historical and projected development of core PLC consuming countries from 2016 to 2022.
- Table 1 presents 2019 growth for PLCs by industry sector and key country – providing a projection of short-term market performance.
- Table 2 presents compound average growth rates (CAGRs) for PLCs by industry sector and key country for the period 2018 to 2022 – providing an average projection of short- to mid-term market performance.
Considering the outlook for 2019 first of all, illustrates that of the key countries considered, Germany is set to experience the largest PLC market contraction, followed to a slightly lesser extent by China. Our outlook for Germany in 2019 was revised downwards fairly recently, and our figures here reflect the impact this will have on the market for PLCs. Looking more deeply at Germany (in Table 1) reveals market declines in important and large sectors for PLCs such as food & beverage machinery, packaging machinery and even materials handling equipment; a diversified sector that has been performing at an average, or above average level in recent years. Japan’s PLC market is forecast to remain flat in 2019, whilst low growth is forecast for both the United States and India (which is much smaller in terms of revenue).
The manufacturing sectors forecast to have a more positive performance in 2019 (generally speaking) across the five countries are: 1.) oil & gas (both upstream and midstream), which will recover and benefit from renewed investment following consecutive years of significant market declines; 2.) water and wastewater, which is benefitting from higher commodity and oil prices driving investment in desalination and water reuse projects in mining, electronics and oil & gas, as well as water quality and infrastructure plans developing in China and India; 3.) pharmaceuticals, which is on a pathway to increasing levels of plant productivity and flexibility through further automation and digitalization; and 4.) packaging machinery, which despite declining in Germany, is forecast to experience strong growth in China and India where a continuing increase in the consumption of packaged and consumer goods is anticipated.
Looking at the mid-term outlook for key countries and industries by considering the data presented in Table 2, thankfully, a more positive growth situation and outlook for PLCs is presented throughout. Germany will return to a positive growth scenario longer term with its average growth expected to exceed that of Japan once again. The United States and China will also see further strengthening of growth overall; although for China the 8% to 10% levels seen in previous years are not expected to return as the ‘normal’ they once were. India’s PLC market is expected to continue on an above average growth trajectory, although by the end of the forecast period it will represent a very small fraction of the total market (<2% overall).
About Interact Analysis
Interact Analysis is an international provider of market research for the Intelligent Automation sector. Founded in 2017, we have offices across the world, including the US, UK and China. Our team of respected industry analysts delivers high levels of market intelligence in the field of Intelligent Automation. Our analysts have an average 15 years industry experience and our trusted leadership team has close to 100 years’ experience in technology-based research, and we are renowned for providing data and analysis of the highest quality.