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Automation sales will grow in 2015, despite headwinds

01 May, 2015

The global market for industrial automation equipment (IAE) will continue to grow during 2015, but at a slower rate than before, as a result of the low oil and commodity prices and weakened demand from some developing economies. A research note issued by the analyst IHS suggests that these factors will dampen revenue growth by about 1–2% this year, resulting in a growth rate of 4.5% above 2014 levels.

Improving global economic performance – particularly in the US, EU, Japan and India – will help to boost IAE sales in 2015. Although slowing growth in China, and recessions in Brazil and Russia, will limit this expansion, it will be outweighed by the improving conditions in the other regions.

Decreased capital investment in the oil, gas and other commodity-based sectors will affect sales of IAE products into these sectors in 2015 and 2016, but this decline will be offset by growth in other sectors such as automotive, food and beverage, packaging, materials-handling and robotics.

IHS expects the oil and gas industry, which accounted for around 7% of total IAE sales in 2014, to suffer an 8% drop in investment during 2015. This will be somewhat counterbalanced by increased spending in the cement and glass, chemicals, pharmaceuticals, food and beverage, and other sectors.


Of the three main IAE product groups, motors and motor controls will be hurt the most by low oil prices. Sales into the oil and gas sector represented almost 8% of the total revenues for these categories in 2014. Automation equipment will not suffer as much, with the exception of process controllers, which derived nearly 25% of their 2014 revenues from oil and gas. The least disturbed product type will be power transmission products – with the exception of hydraulic products.

IHS expects the industrial automation outlook to brighten further as oil prices start to recover, which is widely forecast to occur by late 2015.

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