Automation Market Downshifts in 2Q 2012

According to Allen Avery of ARC Advisory Group, after several quarters of strong growth following the global recession, automation market expansion has slowed decidedly. Whereas previous quarters saw double- and high single-digit growth rates, the second quarter of 2012 saw a paltry 2.7% growth in supplier revenues.

While they continue to execute many projects around the globe, suppliers cited several reasons for the more modest growth. These include both economic uncertainty in the United States and Europe and a cooling down of the once white-hot Chinese economy. New order activity also fell off somewhat for some suppliers as the rebound effects from the global recession have waned, and they convert their order books into revenues. However, suppliers still reported robust activity in the key power, oil and gas, and mining sectors. The order backlogs that suppliers have accumulated are still healthy, indicating that growth should continue for the foreseeable future.

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