World PLC market down in 2013

IHS Technology reports 2.1% fall in revenues for programmable logic controllers; strong growth in US and food and beverage.

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According to IHS Technology, after a downturn in 2012, the global programmable logic controller (PLC) market declined again in 2013, with revenue falling by 2.1% annually.

As the most mature market, Europe had the largest base for PLC sales in terms of revenue. However, according to IHS it is very slowly dragging itself out of recession. With tight fiscal policies, tight credit conditions in several countries, excess industrial capacity and still relatively weak export demand, IHS noted few signs of a strong upturn in the near future. In light of the lack of strong domestic market demand, the PLC market had encountered a small decline as a whole.

The U.S. market for PLCs is positive; the housing market continues to recover, consumer spending is rising, export markets are improving and the pace of capital spending is increasing. Because of that, the overall market for PLCs in the United States is growing strongly.

Looking at end-user sectors, the fastest growing segments are the oil and gas and food and beverage industries.

Asia Pacific, which has been one of the fastest growing regions in the past few years, had faced a much slower growth rate than before. The IHS report suggested China’s market is the most likely reason for that.

China’s leadership has singled out financial stability as its most important objective, with only moderate stimulus applied. Because of that, many investments have been delayed. Besides, China—as an export-focused market—had faced weakening demand from its leading trading partners, such as Europe. The PLC market had faced two-sided pressure from both domestic and foreign markets.

The Japanese market, however, had a good year. The Japanese government had pushed forward strong economic incentive plans since 2012 by applying fiscal stimulus, engaging in monetary easing and implementing structural reforms. But when turning into the U.S. dollar, the market showed a decline in growth because the currency had depreciated by more than 10 percent in terms of exchange from the Yen to the U.S. dollar.

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