Due to demand in sectors such as packaging, materials handling, machine tools, and agriculture, IHS technology predicts that the industrial machinery market will hit new heights during the next five years, highlighted by a doubling of growth this year.
For this year revenues will reach $1.6 trillion, up from $1.5 trillion in 2013.
This represents an annual growth of 6.3%, more than twice the 2.9% increase seen in 2013.
Strong growth is forecast to continue for the next four years, with revenue rising to $2 trillion by 2018, as shown in the attached figure. During this period, the machinery market’s annual growth rate will averaging between 5% and 6%.
“The improving economic outlook is a key factor in the strong growth of machinery in the coming years,” said Andrew Robertson, senior analyst for industrial automation at IHS. “The growing populations and the expanding middle classes in developing countries are generating more disposable income. This translates into increased demand across a vast number of sectors.”
Sales growth for industrial machines in 2014 is being driven by a number of factors, according to the group. First, higher demand for cars worldwide is spurring the requirement for more spending on tools and robotics in the automotive business, as well as the rubber and plastics segments. Meanwhile, an increase in the standard of living and growing spending on nutrition will benefit the food and packaging machinery sectors.
Additionally, rising spending on technology products will boost the demand for robotics, semiconductor equipment, mining, and oil and gas machinery.
At the same time, increased demand for housing, infrastructure and commercial buildings is benefiting the construction equipment sectors. Moreover, social awareness of green technologies is resulting in higher demand for industrial machines in photovoltaics (PV) and in wind turbines.
Packaging is a sector that is slated for high growth in the next few years with the growth due to investment in lighter packaging. Furthermore, advances in packaging—such as wrapping food in ready-to-cook enclosures, cartons that are never pierced until opened and new aseptic packaging technology—are promoting demand for industrial machines in this sector.
For the past two years, the machinery market in China has experienced considerable overcapacity, specifically in the construction machinery, machine tools and metal working sectors. Machinery production revenue slowed to 1.8% growth in 2012, a huge dip from the 20% growth average from a decade before. As a result, only a few businesses experienced growth, while weak investment in 2013 caused many heavy industries to struggle.
IHS forecasts that this will all be changing in the future as production revenue growth rises to between 10.9% and 8.1% each year during the forecast period.