El Segundo, Calif. — The demand for machines in manufacturing sectors such as agriculture, packaging, materials handling, and machine tools will drive revenues to $1.6 trillion in 2014, up from $1.5 trillion in 2013, according to a new report from IHS Technology. The annual growth of 6.3 percent this year is more than twice the 2.9 percent increase in 2013 thanks to improving economic conditions worldwide, said the market researcher.
IHS analysts expect strong growth to continue over the next four years, with revenue increasing to $2.0 trillion by 2018. During this period, the machinery market’s annual growth rate will average between 5 percent and 6 percent.
One of the biggest growth drivers by region over this forecast period will be China with production revenue growth increasing between 10.9 percent and 8.1 percent each year, according to IHS. This is a marked difference from the past two years when the machinery market in China experienced overcapacity in several segments including construction machinery, machine tools and metal working.
“The improving economic outlook is a key factor in the strong growth of machinery in the coming years,” said Andrew Robertson, senior analyst for industrial automation at IHS, in a statement. “The growing populations and the expanding middle classes in developing countries are generating more disposable income. This translates into increased demand across a vast number of sectors.”
The IHS Machinery Production Market Tracker report finds that sales growth in 2014 is driven by several factors including higher demand for automobiles worldwide, which is increasing the need for more spending on tools and robotics in the automotive industry as well as rubber and plastics segments. Another driver includes increased spending on tech products that is expected to increase demand for robotics, semiconductor equipment, mining, and oil and gas machinery.
The report also finds that construction equipment sectors are growing thanks to increased demand for housing, infrastructure and commercial buildings, and social awareness of green technologies is driving up demand for industrial machines used in photovoltaics (PV) and wind turbines.