Dick Slansky remains surprised at how quickly the automotive market has rebounded from the 2008-2009 downturn. But in looking back at 2011, this senior analyst with ARC Advisory Group (ARC, www.arcweb.com) in Dedham, Mass., notes that he’s particularly impressed by global projections for light vehicles. Their sales were projected to be 6 percent higher in 2011 than 2010. “That’s being driven by China, the Korean market, the Brazilian market and India,” he says.
2011 also saw a big transition of where vehicles are manufactured. For first time in 2010 and continuing through 2011—and forecast for 2012 and farther out—the non-North-American-and-European world accounted for more than 50 percent of sales, Slansky remarks.
Another major shift that’s occurred and will continue to occur is the transition in Europe and the rest of the non-North-American world from pure fossil-fueled vehicles, he says. “We’ll see this really pick up in Asia Pacific countries, where demographics show a steady increase of migration of people to large urban centers.” Those urban areas deserve attention, Slansky believes, because they will drive the use of electric vehicles. “In China now, there is a huge influx of electric scooters. So for the Chinese to make the transition to electric cars is a no-brainer,” he says.
However, “in China, this relentless continuous transition may cause a downturn for the next two or three years. That’s because their growth has been so accelerated,” Slansky says. But even with this cooling-off period, the growth will be strong, he believes.
Packaging comes on strong
The same could be said for the packaging and processing equipment markets. “We have seen a strong 2011,” observes Tom Egan, vice president, industry services, with the Packaging Machinery Manufacturers Institute (PMMI, www.pmmi.org) in Reston, Va. “And IPR [Industrial Product Reports Inc., Hauppauge, N.Y. (www.industrialprojectreports.com) presented at PMMI’s annual meeting in November 2011 that ‘2012 is looking strong.’ ”
However, change has been anything but overnight. “This has been occurring for years now. If anything, though, we—packaging and processing equipment suppliers and the whole of manufacturing—are changing at a more rapid and constant pace,” Egan explains. He adds, ”At times, the highs get quickly higher and the lows get quickly lower.”
Predictably, struggles exist. One significant current one pits a company’s manufacturing group against its information technology (IT) group over the ability to remotely diagnose machines. “The technology is here, but CPG (consumer packaged goods) end users’ IT groups have concerns about allowing access to the machines. Therefore, some services that can be supplied are not being fully used,” Egan says.
“Production is saying, ‘Keep lines operating continuously’—and when there is a problem, ‘We need to address that quickly,’” Egan says. He observes that the path to quick fixes is granting access to the suppliers of the manufacturing-floor equipment, because they have the subject-matter expertise. “Suppliers in conjunction with controls providers give tools that will allow quick diagnostics.” The goal is to have the suppliers’ and controls providers’ solutions pass only once through IT’s barriers of rules and protocols, Egan states. “But IT may be preventing this now,” he says.
Egan says an interesting growth area is expected in user interfaces because of touchscreens, combined with automation minaturization. “To reduce the footprints of machines, everything is getting smaller,” Egan notes. “And controls are becoming so familiar that even your grandmother could use them.” Frequent workforce turnovers and workforce training, he says, drive that engineered familiarity. “If you can make controls simpler and more easily identified for the operator, that makes the human-machine interface easier,” Egan says.
Chemicals return to form
Like packaging and automotive, the chemicals market has returned to form, says The Freedonia Group Inc. (www.freedoniagroup.com) in Cleveland, Ohio, in its Nov. 2011 report “Oilfield Chemicals.” The research firm also forecasts that demand for formulated oilfield chemical products in the United States will advance 8.3 percent annually through 2015 to $13.6 billion.
Chemical market recovery comes, Freedonia says, thanks to rising oil prices and ongoing efforts to develop shale formations in different parts of the U.S. “Although gas prices remain low by historical standards (and much lower than oil prices in relative terms), the expectation of eventual price increases—and the immense promise of shale gas production—has motivated producers to step up investments in high levels of oilfield drilling and stimulation activities to maximize output from existing wells and develop new resources.”
Through expanding oil and gas production from an increasingly mature resources base, Freedonia believes heightened levels of industry activity will be required. That activity will drive future growth in oilfield chemical demand, the research group says.