Last fall, Control Engineering magazine partnered with Morgan Stanley to study the 2010 outlook for the automation, control, and instrumentation markets. The results were presented in a December article, 2010 Global Automation Industry Outlook.
At this past February’s ARC World Industry Forum, Control Engineering’s editorial director, David Greenfield, interviewed automation supplier executives including Emerson Process Management president, Steve Sonnenberg. The purpose of these video interviews was to get their reactions to this study and their views on the 2010 economic outlook.
The interview videos were just posted: Industry executives reflect on business outlook survey–Part 1, Part 2, Part 3, Part 4. Overall, the outlook is for improving conditions through the rest of 2010. Here are some thoughts that Steve shared.
At the start of the second video, Steve was asked about the order pipeline. He noted that the 4th quarter of 2009 saw growth in the maintenance, repair, and operating (MRO) supply business. When the global economic climate turned down, many process manufacturers reacted by freezing projects. People stopped spending while trying to sort out what to do next. In 2010, many large projects in countries such as Brazil, Mexico, China, and the Middle East countries have become unfrozen and are progressing.
In the second video around the 8:30 mark, Steve was asked about the effect of global capital constraints. He explained that the tightening of capital did impact business levels, but that the large, multinational manufacturers have capital to invest in process automation projects. These capital constraints can be an issue for smaller companies.
About 1:20 into the third video, Steve described the outlook for various manufacturing sectors. The chemical industry has been showing positive signs after a long period of difficulty. The industries with the most positive outlook appear to be oil & gas and power. There have been many significant oil & gas discoveries around the world that are being advanced. With funding by many governments, alternate energy projects show growth. Nuclear power projects also show growth opportunities.
Although not overly optimistic, the executives across the various automation suppliers did express optimism for the rest of 2010 and beyond.
I saw a March 18 notice that a follow on economic outlook survey is being conducted for the automation industry. I’m not sure how long the survey is open, but if you’d care to, take the survey and share your thoughts.
Update: Per the Automation & Control LinkedIn forum, the survey closes after April 5th, 2010.