Demand for industrial controls in China is forecast to expand 13 percent per year through 2013 to 213 billion yuan, according to a report by The Freedonia Group (www.freedoniagroup.com). Growth is expected to benefit from the ongoing expansion of manufacturing output in key industries such as motor vehicles, and electrical and electronic products. Advances are also expected to be supported by the growing preference for more technologically advanced control products that enable manufacturers to improve their productivity and remain competitive. In addition, rising levels of capital investment in many industries is forecast to provide new sales opportunities for suppliers of industrial controls. On the other hand, Freedonia says gains will be restrained by competition from personal computers (PCs) programmed to perform control-related functions.



Aside from gaining impetus from expanding domestic demand for industrial controls, shipment growth is expected to benefit from increasing exports of Chinese made products to overseas markets. Although industrial control imports will continue to account for a sizable share of total demand, China’s trade surplus will continue to expand, an outcome of enhanced production capacity by domestic suppliers, as well as multinational players setting up manufacturing facilities in China.

Demand for advanced controls will continue to exceed that for conventional controls, benefiting from their superior precision, reliability, durability and cost-effectiveness. Industrial control software and control systems integration services are projected to be the best-performing product segments through 2013, supported by the move toward integrated, high-end application performance enabled by software-based motion controls. Adjustable speed drive controls will remain the largest advanced industrial control product segment, primarily bolstered by the superior energy conservation performance they provide. Conventional industrial controls will continue to find use in a variety of applications, benefiting from their low costs. Both general and specialty conventional controls are facing increasing functional competition from advanced solid-state products, though the greatest impact has been felt among general conventional controls.

INDUSTRIAL CONTROLS IN CHINA

(billion yuan)

% Annual Growth

Item

2003

2008

2013

03-08

08-13

Industrial Control Demand

42.5

114.0

213.0

21.8

13.3

Advanced

19.4

59.1

112.0

25.0

13.6

Conventional

23.2

54.9

101.0

18.9

13.0

+net exports

3.1

6.8

11.0

Industrial Control Shipments

45.6

120.8

224.0

21.5

13.1

Source: The Freedonia Group, Inc.