NEWS RELEASE                                   MARCH 2004

U.S. Share of World Process Equipment and Instrumentation Market Shrinking

While the world market for process equipment and instrumentation is surging upward, the U.S. share is lagging behind.  Whereas in the past, sales in individual states such as California were larger than those in all but a few countries, this will no longer be the case.  This is the conclusion of the McIlvaine Company in its World Industrial Analysis and Forecast.

The U.S. will remain the world leader in production of pharmaceuticals.  FDA regulations will limit competition from foreign production.  The U.S. will maintain its lead in semiconductor manufacturing, but its share will diminish over the next five years. The U.S. is no longer the leading purchaser of process equipment and instrumentation in industries such as steel, cement, flat panel displays, disk drives, and many others. Its share in these segments will continue to shrink.

In some industries such as power, the U.S. remains the world’s largest purchaser because of replacement and parts purchases of equipment and instrumentation.  But China is now the leader in purchases for new power plants.  The same is true for municipal wastewater treatment and municipal drinking water plants.

In the past, developing countries purchased less process equipment and instrumentation per unit of production (e.g. kilowatt hours of electricity).  This is no longer the case.  In fact, China is buying the most sophisticated super critical boilers with the latest environmental equipment.  By contrast, most boilers in the U.S. are sub-critical and many do not have the latest environmental controls.

In the iron and steel segment, China is the leader and is going to increase that lead by 2006.  Here are comparisons for the three top purchasers in the years 2000 and 2006. These figures are displayed as percentages of the world 2000 market.

Iron & Steel Process Equipment and Instrumentation Revenues as a % of the world market in 2000

Over this period, the world purchases will rise from 100 percent in 2000 to 112 percent in 2006.  So, the Chinese share will rise from 16 percent to 25 percent while the U.S. share will fall from 12 percent to 9 percent.

In the chemical industry, the world market using the base of 100 percent in 2000 will rise to 111 percent in 2006.  The U.S. share will remain constant at 24 percent and, as a result, the 2006 revenues for process equipment and instruments will be equal to 27 percent of the 2000 market.

Chemical Industry Process Equipment and Instrumentation Revenues as a % of the World 2000 Market

In the chemical industry, the U.S. will remain the clear leader.  In fact, the four largest states in terms of purchases on a combined basis, exceeded all other countries of the world in 2000.  However, by 2006 China will purchase more chemical process equipment and instrumentation than these four states.

The pharmaceutical sector is the brightest for U.S. suppliers of process equipment and instrumentation.  Using 2000 as the base year, world sales will rise to 150 percent by 2006.  U.S. sales will keep pace maintaining a 33 percent market share.

Pharmaceutical Industry Process Equipment and Instrumentation Revenues as a % of the World 2000 Market

Japanese market share will drop as sales remain nearly level.  France, the third largest market, will expand at the same rate as the market as a whole.  The three largest state purchasers in the U.S. will maintain a share which in 2000 was slightly less than Japan, but by 2006 will be greater than Japan or any other country.

McIlvaine provides continuously updated forecasts for many different industry segments in each country of the world and each state in the U.S.  Custom options include forecasting specific products.  For more information on World Industrial Analysis and Forecast Click here.