This growth is driven by rising industrial production, a strong global economy, growing machinery production and capital expenditure. In 2017, the automation equipment category led with 37.1 percent share of the industrial automation equipment market, followed by power transmission equipment with 32.9 percent, and motors and motor controls with 30 percent. Total industrial capital expenditure is expected to continue to grow by 3 percent, year over year, in 2017, 6 percent in 2018 and 4 percent in 2019.
IHS Markit expects that some companies will close their doors to new proof-of-concept smart manufacturing projects in 2018, until existing and ongoing projects are completed or show a return on investment.
Rising machinery production points to growing demand for automation equipment going into the new machines. The global industrial automation equipment market is expected to maintain solid growth through 2019, for the following reasons:
In 2017, many smart manufacturing initiatives began to materialize, especially in countries like the United States, Germany and China. However, more multi-national end-users are expected to only accept trials of new solutions that are fully funded by the vendor, until returns are realised.
Total industrial capital expenditure is expected to continue to grow through 2019. Specifically, spending on industrial automation equipment is forecast to increase in 2017 and beyond.
Rising industrial production typically follows a stronger world economy. After 3.2 percent growth in 2017, the IHS Markit forecast in April 2018 showed world real gross domestic product (GDP) growth is projected to increase 3.4 percent in 2018 and 2019 respectively.