ARC Says Asia to Become Largest PLC Market by 2016
DEDHAM, Massachusetts -- According to analysts at ARC Advisory Group, Asia will recover more quickly from the current economic turbulence to become the largest PLC market from 2016 onwards. The current problems are mostly of a cyclical nature, and long-term indicators point nowhere but up. Still, the times of prolonged double-digit growth will not return.
This development is being driven by demand in China and the emerging Asian market, which will continue to grow at above average rates. In addition to Japan, China, Korea and Taiwan have now established themselves as part of the global machinery market. These markets will also shift towards more high-end automation in the forecast period, developing more sophisticated machinery for export.
"The manufacturing Renaissance, Industry 4.0 and re-shoring are trends that describe the future return of manufacturing in developed markets. However, future development will prove whether this is wishful thinking or if manufacturing and automation will re-emerge in developed nations," says analyst Florian Güldner, the principal author of ARC's "PLC and PLC-based PAC Global Market Research Study."
Re-Shoring: Long-Term Potential for the PLC Market?
Re-shoring describes the process by which manufacturing returns to developed nations, which had previously outsourced and off-shored manufacturing to countries with lower wages, such as Eastern Europe and emerging Asia.
In some areas, ARC sees this trend bearing large potential, especially when it comes to industries that need to react quickly to changing consumer preferences. The re-shored industries will automate larger parts of production to counteract the wage-structure in developed countries. In the long run, we expect this to have a slight positive impact on market development.
A Manufacturing Renaissance – Technical Requirements
The increased degree of automation in re-shored markets will demand PLCs that support information-driven manufacturing, linking the plant floor to MES and ERP layers and—in some cases—directly to the consumer. In addition, PLCs need to handle large amounts of data, feeding them back to higher-level systems. The results are self-optimizing, cyber-physical systems and modular plants and factories.
PLCs are now integrating safety and cybersecurity, but in future will also need to integrated energy management, analytics and other functions.
A manufacturing renaissance is driven by the need to react to consumer demand. The largest volume of consumers is still in Europe, Japan and North America. However, the increasing wealth in emerging economies and the rising urban middle class lowers the incentives to shift manufacturing back as long as transportation costs and time are manageable. In ARC's view, this development will further push the PLC to emerging Asia.