Automation Market Hit $14 Billion In 2006

May 23, 2007
Will grow at 12% through 2011

The next five years will be a good one for automation suppliers as strong demand across the entire spectrum of the plant lifecycle and the scope of nearly all automation products and applications continues. According to a new ARC Advisory study, the total services market served by the automation suppliers approached $14 billion in 2006, and will grow at an average annual rate of over 12% through 2011.

Mature markets such as North America and Europe, the Middle East, and Africa (EMEA) constitute the bulk of the market for automation services, but revenue growth will be concentrated in the developing economies of China, the rest of Asia, and Latin America, the report said. The Chinese market, for example, will be more than double the size of Japan by 2008 for automation services provided by suppliers.

The report finds that a major contributor to the growth in services over the next several years is the continuing shortfall of skilled labor among end users. The average age of workers in manufacturing industries in developed countries is already over 50. The paradox is that although workers are getting older on average, the average retirement age has dropped to 58 years, in many cases due to the reengineering process of the past couple of decades. Several governments have responded by increasing the statutory age of retirement, in the case of Germany for instance, it has increased to 67 years.

In a recent interview, a major refining company stated they had lost 2,500 years of experience last year when 100 operators retired at one site, each with an average of 25 years of experience. As further evidence, a major chemical company analyzed their plant demographics and found one of their largest plants would lose 75% of its operating staff to retirement by the end of this decade. The same is also true of many discrete manufacturers.

Copyright Agence France-Presse, 2007

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