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News Release from: IMS Research
Edited by the Manufacturingtalk Editorial
Team on 30 January 2004
Motor drives demand will be up and down
Stateside
The North American market for AC and DC motor drives declined 2.3% over the past two years, and demand should pick up during 2004 it could lose momentum during 2005, says a report.
The North American market for AC and DC motor drives declined 2.3% over the past two years, according to the latest consolidated results from motor drive suppliers, prepared by IMS Research A weak economy in 2002 led to a 3.2% contraction in 2002 revenues while war-induced uncertainty postponed any recovery in the industrial sector until late 2003
This article was originally published on Manufacturingtalk on 31 Jan 2003 at 8.00am (UK)
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According to drives analyst Steve Odom "The industry has faced a dual challenge of a slow economy limiting sales opportunities and a trend towards smaller drives weighing on average unit prices." Unit growth in drives continues to enjoy moderate success as awareness of the total cost of ownership advantages of motor drives builds and new application opportunities arise.
The bulk of unit growth will continue to be in the lower power ratings.
In 2001, AC drives less than 3HP made up 56% of the total units.
In 2006, these small drives will make up 58% of drives sold.
The downside is, all other things being equal, each percentage point move upward reduces total industry revenues by $20 million through a reduced average unit price.
Going forward, the outlook for the North American motor drives market is for an increasingly competitive marketplace.
As part of these results, IMS Research has revised economic expectations downward for 2005 and 2006.
The pickup in demand that began in the second half of 2004 should continue to gain pace through 2004, but is expected to lose momentum in 2005 in the absence of any strong structural drivers.
According to Odom, "More competitive products from all suppliers, increasing market traction by Japanese firms, and only modest economic growth, will make for increased competitive pressures in the drives market.
Drives manufactured locally should have a slight advantage from a continued weakness in the dollar.".
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