Emerging Economies Drive PLC Sales

Though future growth will be at a slower pace, the global market for programmable logic controllers remains robust, study indicates.

Strong economic growth in Asia and Eastern Europe significantly boosted the programmable logic controller (PLC) market in 2007, according to a recent study by ARC Advisory Group Inc., Dedham, Mass. While economic expansion is expected to continue, future growth will be at a slower pace. The worldwide market for PLCs is expected to grow at a compounded annual growth rate (CAGR) of 6.5 percent over the next five years, ARC said. The PLC market reached nearly $9 billion in 2007 and is forecasted to grow to more than $12 billion in 2012, according to the study, titled “Programmable Logic Controller Worldwide Outlook.”

Robust investments in manufacturing and infrastructure industries continued worldwide in 2007. “Emerging economies, such as those in the BRIC countries (Brazil, Russia, India, and China) and Eastern Europe, helped propel the growth of the PLC market, which was driven by increasing consumer demand from the growing middle class in those countries, adding new infrastructure within those countries to boost their quality of life, and a positive environment for capital investments in emerging markets,“ said ARC Senior Analyst Himanshu Shah, the principal author of the study.

Globalization impact

Globalization is causing manufacturing companies to invest in creating new capacities in various industries such as chemical, cement, metals, pharmaceutical, and textile, ARC said. Building automation is also experiencing strong growth with massive commercial, industrial, and residential building projects around the world. PLCs, which are used across all major discrete and process industries, will continue to experience growth, as robust, emerging economies create buoyant demand for increasing automation, ARC predicted. While a cooling off period is expected, automation demand is expected to continue to grow during the forecast period.

The market is demanding the programmable automation controller (PAC), a multi-disciplined controller capable of providing real-time logic, motion, and process control, in addition to human-machine interface (HMI) and other functions, on a single platform. Major automation suppliers have extended PLC functions beyond just logic, especially in higher end models. The PLC-based PAC market growth is expected to be higher than the overall PLC market growth. This growth will be driven by the logical extension of PLC functionality to a multi-discipline platform. ARC predicts that most of the small and large PLCs of today, as well as some of the micro PLCs, will morph into PACs, and the pure PLCs will remain at the nano and some of the micro level.

ARC Advisory Group Inc.

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