The world market for I/O modules fell 1.4% to $7.2 billion in 2012 as global economies struggled, states IHS Technology.
With Europe’s economy still recovering in 2012 from the recession, and Asia’s economies slowing down, 2012 was a weak year for industrial control markets. As a result, the market for I/O modules, with strong ties to industrial control, also retreated, according to the report, "The World Market for I/O Modules–2014 Edition," recently published by IHS.
Compared to its 2012 performance, the global I/O market delivered better results in 2011, growing 12.3% from 2010.
Programmable logic controllers (PLCs) and distributed control systems (DCSs), the two main control system types using I/O modules, have a strong effect on their market. As the PLC market shrank in 2012, the market for I/O modules used in PLC systems dipped likewise, though the fall was slight at less than 5%. This was the main reason for the deceleration in the I/O market, as PLC I/Os represented most of the activity. In particular, weak demand for machinery in major regional domestic and export markets, especially in Europe, China and Japan, accounted for the slowdown in PLC systems.
For its part, the DCS market was less affected by the weak global economic situation and grew slightly. The market is aligned more with process industries, which have long investment cycles and bear more immunity to economic fluctuations. Because of this, the market for DCS I/Os also grew in 2012, even if expansion was at less than 2%. Growth was especially strong in the Americas and Asia-Pacific.
PC-based I/Os took only a small proportion of the total I/O market, rising by about 5% in 2012. The reasons for growth were that PC-based I/Os are mainly used in market applications such as building automation, utilities and transportation, and the market is growing from a relatively small revenue base.
American I/O Market a Bright Spot
Some bright spots remained despite the fall of the I/O market in 2012. The American regional I/O market led in all areas with growth of nearly 5%.
A recovering economy helped, as the U.S. market accounts for most of the I/O trade for the Americas. Demand was especially strong for automation systems in process industries, and good growth occurred in various sectors, including oil and gas, food and beverage, packaging, and water and power, which were driven by strong domestic demand in their areas.
The Asia-Pacific market grew slightly during this same period, but growth was disappointing given the major economic slowdown in China and India for 2012. Moreover, many export partners, such as Europe and Latin America, were not doing well, contributing to Asia-Pacific’s woes. Meanwhile, China was searching for new ways to sustain its growth, which required time to cope with challenges.
Likewise, the Japanese market—which has the greatest dependence on machinery exports—was the most seriously affected in 2012. Japanese I/O vendors were more susceptible to the slowdown in Asia, especially in the case of PLC I/Os, as Asia-Pacific has been the primary export market for machinery by the Japanese.
In the Europe-Middle East-Africa (EMEA) market, there were signs of recovery, but the region’s general performance hasn’t reached its pre-recession levels. No strong growth drivers were present following the area’s weak domestic demand and export business. However, the recovery was getting increasingly obvious towards the end of 2013.
Asia-Pacific still has the potential to regain rapid growth, which will take place just as soon as economies rebound. The recovery in Asia-Pacific will benefit EMEA, while strong growth in the American I/O module market will be sustained by robust domestic demand as well as improving external markets.
Demand for I/O modules in the major regions will recover after 2012 to drive both domestic consumption as well as exports with annual growth to average 6% from 2013 to 2017.