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Europe’s MV drives sales decline as the rest of world recovers

10 February, 2013

The global growth in sales of medium-voltage (MV) drives slipped from 20% in 2011 to just 8.8% during 2012.

But a new report from IMS Research predicts that greater stability in the Chinese and US markets will allow global growth to recover to 10% during 2013, although Europe will suffer a 4.6% contraction, after growing by just 2% in 2012.

Both public and private investment withered in Europe during 2012 due to the sovereign debt crisis, and this has lasted longer than expected. But IMS predicts that European sales will bounce back slightly during 2014.

The graph (above) shows the regional breakdown for sales of MV drives during 2011 (with the bars showing sales in $m), as well as the growth rates for 2012 (blue) and 2013 (green).

Last year, potential changes in the political environment in both China and the US, led to hesitant spending. After years of explosive growth in China, real fixed capital formation growth fell for the third consecutive year – from 22.5% in 2009 to 7% in 2012 – adding to fears of a hard landing for the Chinese economy.

But the new leadership in China is now providing stability, with growth in the MV drives market likely to be stronger during 2013. “Although exports continue to be a concern to manufacturing markets, government-funded infrastructure projects in 2013 will provide fiscal injections to the Chinese MV drives market,” says IMS motor controls and switchgear analyst, Kevin Schiller, “and are forecast to result in accelerated revenue growth of almost 10%, compared to 4% in 2012.”

The 2012 election in the US caused sensitivities around potential changes to government spending and taxation. But the US economy is now more stable, and IMS expects MV drives revenue to grow by more than 19% from 2012, due mainly to the country’s prosperous oil and gas market.

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