Pneumatic market continues to show potential

Sales in the European market for pneumatic equipment continue to show potential for growth, expected to rise from $3.49 billion in 2000 to $4.56 billion in 2006

In the short term, the strength of the European economy is expected to fuel demand. However, according to a new study by Frost and Sullivan, the international marketing consulting company, mounting price pressures and the likely moderation of European economic growth in the medium term mean that suppliers of pneumatic equipment must focus their competitive strategies to maintain margins.

This article was originally published on Engineeringtalk on 18 January 2001 at 8.00am (UK)
Related stories

Report shows new trends in plastics processing
Although price still remains a critical purchase determinant, selecting the right equipment to realise enhanced productivity and efficiency has become the focal point for plastics processors

Advanced technologies aid growth in pump markets
Sluggish growth has characterised the mature European markets for centrifugal and turbine pumps in recent years

Technical innovation and interaction with customers to produce complex pneumatic systems are rising in importance.

At the same time, falling prices are generating a need for volume production in order to gain economies of scale, which is driving consolidation between leading firms.

Frost and Sullivan's study highlights the necessity for suppliers to choose where to position themselves on the price vs quality continuum.

Mik Sabiers, Research Manager at Frost and Sullivan comments: 'The automation of production processes is sustaining strong demand for pneumatic equipment, and as secondary producers automate production, pneumatic systems are increasingly penetrating new application areas.

Equally, users of the large installed base of pneumatic equipment are being encouraged to invest in new products by the constant upgrading of pneumatic technology.' The combination of electronics with pneumatics and the creation of intelligent products, which are both faster and permit precise electronic control, is spurring replacement demand and contributing to the market's appeal to new users.
Further reading

Sustained growth for industrial weighing machinery
A new analysis of the European industrial weighing machinery market highlights untapped end-user sectors and emerging opportunities in Eastern Europe

Study details new petroleum refining technologies
Soaring energy requirements are motivating new investments in refining technologies

Vacon is company of the year
Finnish company Vacon has been named recipient of Frost and Sullivan's 2004 Industry/ICE (Instrumentation and Controls and Engineering) Company of the Year Award

Nevertheless, while it is strong, growth is not outstanding.

The market is sensitive to variations in gross domestic product (GDP) and is being impacted by the ability of new products to last for an increased number of product cycles.

Most importantly, growth has been eroded by falling prices.
Latest job opportunities

Access Platform Project / Design Engineer
Access Platform Project/Design EngineerEngineer with previous experience of MEWPS required to convert customer orders into an engineered reality. An understanding of manufacturing capability is required as is an understanding of appropriate vehicle...

**JUNIOR ELECTRICAL DESIGN ENGINEER** URGENT
JUNIOR ELECTRICAL DESIGN ENGINEER - BUILDING SERVICES - URGENT - CITY CENTRE
Our client is one of the UK's Leading Building Services consultancies and they are currently looking for junior electrical design engineer (building services) to join...

*** ENGINEERS WANTED! ***
**** ENGINEERS WANTED! ****
We currently have vacancies across Leicester and the East Midlands for skilled engineers in all disciplines. Whether you are currently employed and looking for options or are out of work call us today for a confidential...

Suppliers to the European market for pneumatic equipment compete in an intensely competitive environment.

Pneumatic equipment is combined for use in pneumatic systems.

Individual product areas are therefore strongly interrelated, and growth across the market tends to be fairly uniform.

The varying intensity of price competition is largely responsible for differing rates of revenue growth in individual product markets.

Growth in this market for valves, accounting for the largest share of sales across all product markets, is expected to be driven by favourable economic conditions, by the continuing popularity of solenoid valves, and by the rising availability and use of intelligent valves.

Meanwhile, similarities can be drawn between the market for filter regulator lubricators (FRLs) and the market for cylinders.

In both product areas, revenue growth is being impacted by falling prices.

While demand for FRLs is being driven by growing demand for pneumatic systems, it is being constrained by price reductions caused by competition and the sale of products in a modular format.

In terms of national markets, Germany remains the largest market, followed by the UK and Italy.

A strong industrial focus including a large materials handling and assembly sector and a large processing sector contributed to Germany's importance.

The revenue significance of both the UK and Italy will experience an upswing and under the influence of stronger economic activity, the significance of France, Iberia and Benelux is expected to increase.

More than 100 competitors are active in the European market for pneumatic equipment.

A substantial number are smaller firms operating in their domestic markets on a regional basis.

An upper tier of the market contains five larger and internationally focused participants: Festo, Bosch-Rexroth, IMI Norgren, SMC and Parker.

Additional firms operate on an inter-European basis, but have yet to attain the market share of those in the first tier.

Competition between firms in all areas of the market is intense.

The standardisation of many products means that price is the principle method of distinguishing between products.

Delivery, the author observies, is also crucial.

As demand for control systems rises, it has the power to alter the competitive landscape.

Competition may become less price focused as customers place greater emphasis on expertise, Frost and Sullivan's study concludes.