Automation Services Market a Bright Spot in Dark Picture

ARC sent out a release this morning on the prospects for the automation services market. They look pretty good:

The services business remains one of the best growth opportunities for automation suppliers today, and one of the best ways for end users to take advantage of the growing expertise of suppliers to reduce plant maintenance costs, operating costs, and project costs. The worldwide market for supplier provided automation services will grow at a compounded annual growth rate (CAGR) of close to 7 percent over the next five years, according to a new ARC Advisory Group study.

Larry O'Brien, author of "Automation Services Market Provides Growth, Cost Reduction Opportunities in Tough Times," provides the context for this growth:

“Today, we stand on the verge of an era of transformation for the services business.  In the prevailing economic chaos, many end users find their problems are even worse than before. The pace of job loss in all manufac-turing industries in the past few months alone has been staggering. Tight operating environments and reduced demand are forcing companies to cut costs wherever possible. Even with the recent collapse in oil prices, projects costs remain high and many end users have postponed projects. The result is that users rely on suppliers to provide them with a continuously expanding scope and depth of automation-related services."

O'Brien continues:

Both end users and EPCs find it increasingly difficult to hire qualified personnel. This is not only an issue in developed regions, such as North America and Western Europe.  Even in China, which turns out a large number of engineering graduates every year, too few highly trained and qualified personnel are available to fill the needs of the process industries. 

The automation suppliers have stepped in to fill these requirements. Many key people with expertise in automation that are retiring from the end user companies are finding new careers as consultants and engineers at supplier companies. Suppliers, as a whole, have greatly increased their application expertise and project execution capabilities to fill the voids left at the end users and EPCs."

A complete copy of the executive summary of the report is here