Control valve shipments returned to pre-recession levels during 2011, however, risks remain, according to a new ARC Advisory Group study. High oil prices due to growing demand from emerging nations and continuing political turmoil in the Middle East could upset growth. U.S. unemployment rates continue to be a deterring factor, as does the European debt crisis. The slowdown in China and India further increases the risks facing control valve vendors. Due to the numerous risks, ARC says many vendors are wondering where, and how much, to invest in their manufacturing capacity and after-market service capabilities.
Key highlights for the control valve market in 2011 include growth in both established and emerging economies, especially for energy and infrastructure related applications, according to the study. Although control valve shipments were down in 2010, the majority of suppliers enjoyed a rebound in new orders over the course of 2010, with a corresponding increase in order backlogs. This growth in incoming orders during 2010 translated to a growth for control valve shipments to many of the developing regions in 2011. Many of the developed regions also rebounded back to healthy growth in 2011 as many suppliers’ aftermarket business come back on-line. The European debt crisis loomed throughout the year, but ARC says it did not have a significant negative effect on control valve shipments in 2011.
“The ongoing European debt crisis is a legitimate concern going forward, however, as is the softening demand from China and India,” according to Senior Analyst David Clayton, the principal author of ARC’s Control Valve Worldwide Market Outlook. “China”s GDP growth has slowed to its lowest rate since the depths of the global financial crisis in 2009. Second-quarter growth of 7.6 percent, down from 8.1 percent, in the previous three months was in line with expectations, but dampened hopes that the world”s second largest economy would alleviate the economic uncertainty looming over the global markets.”
For more information on the Control Valve Worldwide Market Outlook, visit ARC Advisory Group’s Market Research section at www.arcweb.com.