What Recession? Sales of ac Drives Still Going Strong

July 24, 2008
Strong growth continued in 2007 for the low-power ac-drives market thanks to robust investments in manufacturing and infrastructure industries worldwide.

So says the ARC Advisory Group, Dedham, Mass., which expects the worldwide market for low-power ac drives to grow at a compounded annual growth rate (CAGR) of 8.9% over the next five years. The market was over $7 billion in 2007 and is forecasted to be nearly $11 billion in 2012, according to a new ARC study.

ARC calls low-power ac drives those that include micro (under 5 kW), low end (5 to 40 kW), and midrange (41 to 200 kW). Emerging economies, such as those in the BRIC countries (Brazil, Russia, India, and China) and Eastern Europe, helped propel growth in this equipment. Senior Analyst Himanshu Shah ([email protected]), the principal author of ARC’s “Low Power AC Drive Worldwide Outlook, Market Analysis & Forecast Through 2012,” says despite a softening U.S. economy, automation suppliers continued to post strong revenue growth in the latter part of last year, propelled by robust Greenfield plant construction in developing regions and strong project activity in the oil and gas sector. Suppliers reported big project wins in the oil and gas, refining, petrochemical, and mining sectors. Significant order back-logs ensure that business will continue at a healthy pace, he says. While the North American market may face some economic challenges in the quarters ahead, demand for automation products will remain strong, thanks to much needed modernization of the industrial infrastructure that is well under way.

Demand-side conditions in the automation marketplace remain strong, with continued heavy investment in China, India, Latin America, Eastern Europe, and the Middle East. The oil and gas area is now the leading growth industry for automation.

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ARC Advisory Group

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