Market research shows decline in demand for low-voltage drives
According to the latest data from IMS Research, the worldwide market for low voltage AC and DC motor drives is experiencing a greater decline than previously expected as a result of the economic downturn, with the revised forecast predicting a contraction of 5.6 per cent in terms of revenues over 2008 levels. Latest data obtained for the last quarter of 2008 and the first quarter of 2009 indicate a decline in the motor drives market across all regions.There are several reasons behind this downward revision. Most notably, machinery markets in Europe, Asia, and the Americas are performing worse than predicted, with many OEMs experiencing dramatic declines in order intake during the last quarter of 2008 and the first quarter of 2009. The revision is also attributed to declines in regional GDP forecasts for 2009. During the fourth quarter of 2008, GDP declined by 1 per cent in the USA, and 1.5 per cent in the EU, while Japan experienced a contraction of 3.3 per cent. China, the only region expected to experience GDP growth in 2009, reported a 6 per cent GDP increase for the first quarter of 2009. The fact that GDP growth is expected to remain positive in the country is attributed to the effectiveness of the stimulus package enacted by the Chinese government that focuses heavily on energy efficiency and many of the industry sectors that are significant users of motor drives. As a result, the Chinese drives market is forecast to experience positive growth in 2009 in the area of 5 per cent.
Another reason for the market contraction is due to ongoing problems with capital lending. Tight lending conditions are having an impact on previously strong growth sectors such as renewable energy. Several component suppliers and wind turbine manufacturers exhibiting at the Hannover Industrial Automation Show mentioned that while demand for wind projects is still abundant, many of the projects have encountered significant delays due to restricted lending by banks. This has, in turn, caused problems with securing funding for large-scale and very costly wind and solar farm projects.
It should be noted that many suppliers of motor drives have indicated a slight increase in orders in the second quarter of 2009, and forecasts for 2010 to 2012 remain positive. According to IMS Research analyst Jenalea Howell, "Government legislation and stimulus packages will provide opportunities for suppliers to the low-voltage motor drives market, which is expected to come through the recession with a small contraction and resume positive growth in 2010."
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