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German Automation Growth Spurt Expected to Slow

The current fiscal year will yield growth rates between 2 and 5 percent for many core automation technology companies.

Kai Binder, Chief Editor, SPS Magazin
Kai Binder, Chief Editor, SPS Magazin

The enormous growth spurt a lot of German automation companies—and many of their customers—have been experiencing since 2009 is expected to slow for the time being, starting this year. Nevertheless, the mood remains cautiously optimistic.

After the two previous years provided positive double-digit growth for many companies, the dent left in many a companies’ business development by “the year of crisis,” otherwise known as 2009, was initially overcome without greater difficulties. Now disillusionment returns, because—depending on a company’s positioning—the current fiscal year will yield growth rates between 2 and 5 percent for many core automation technology companies.

Still, there is no reason, even in Europe, for dejection or feelings of crisis, primarily because of the continuing tremendous demand for automation components, both in Germany and globally. And German automation companies are especially well-positioned in this regard.

The cause of the declining growth rates is, in many cases, a “negative extraordinary boom.” The term refers to the plain absence of orders coming in from the wind energy plant construction sector and other industries in China, as well as the uncertainty about the state of the Euro that currently prevents many investments.

We can hope that 2013 is going to be a better year. With the final Euro rescue fund (ESM) coming into effect, a calming down of the European sovereign debt crisis is now possible. In China as well, there may be hopes for improvement after the end of the PCP Congress. It is only in regards to solar expansion in Germany that we shouldn’t get our hopes up too greatly. the German government’s political flip-flopping in regards to solar development has caused great damage. However, the need for a solution—especially in light of the energy transition—is urgent.

Even if the growth rates in 2012 initially cause disillusionment, we shouldn’t be drawing any hasty conclusions of an impending crisis for 2013— doing that would be triggering it without fail. And, with all due respect, 2 to 5 percent growth is only a bad value when compared to the previous years.

>> Kai Binder, kbinder@sps-magazin.de, is Chief Editor of SPS Magazin in Germany.
 

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