Data Points: Robust Investments Boost Low-Power AC Drives Market

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Strong growth continued in 2007 for the low-power ac drives marketdue to robust investments in manufacturing and infrastructureindustries worldwide, according to a recent study by ARC AdvisoryGroup. The Dedham, Mass.-based research and advisory firm predictsthat the worldwide market for low-power ac drives will grow at acompounded annual growth rate of 8.9% over the next five years. Themarket was more than $7 billion in 2007 and is forecasted to benearly $11 billion in 2012, according to ARC's study on “LowPower AC Drive Worldwide Outlook, Market Analysis & ForecastThrough 2012.”

Emerging economies, such as those in Brazil, Russia, India, Chinaand Eastern Europe, are expected to help propel this growth.“Increasing consumer demand from the growing middle class inemerging economies, new infrastructures, a friendly financialenvironment for capital investments, and a need for producing andsaving energy were primary factors for huge market growth,”says Himanshu Shah, a senior analyst and principal author of thestudy.

ARC has found that despite a softening U.S. economy, automationsuppliers continued to post strong revenue growth in the fourthquarter of 2007, propelled by robust Greenfield plant constructionin developing regions and strong project activity in the oil andgas sector. Furthermore, says ARC, while the North American marketmay face some economic challenges in the quarters ahead, demand forautomation products will remain strong, thanks to much-neededmodernization of the industrial infrastructure that is well underway. Demand-side conditions in the automation marketplace remainedstrong, with continued heavy investment in China, India, LatinAmerica, Eastern Europe and the Middle East. ARC cites that the oiland gas industry remains the leading growth industry forautomation.

Per the market research firm, globalization has created huge demandfor modern infrastructure, especially in emerging economies.Globalization is also driving the use of advanced automationworldwide. Consequently, ARC has found that ac drives areincreasingly used across all industrial segments. Energy scarcity,in comparison to supply, is also affecting automation in a widerange of industries.