For the fourth consecutive quarter, automation suppliers saw robust revenue growth, posting overall gains of nearly 8 percent versus Q1 2017 (which marked the last quarter of extended losses for the market).
Acquisitions and favorable currency exchange rates played a significant role in the revenue growth of many suppliers, skewing the market picture to a certain extent. That said, many large suppliers reported respectable organic growth during the quarter, indicating strong market fundamentals. The discrete automation sector in Asia, particularly semiconductors and electronics, added considerably to gains. MRO and retrofit activities also figured prominently, and improving business conditions in the US oil & gas sector and other major process industries have begun to spur more investment. Many suppliers reported a double-digit increase in orders, boding well for revenue intake in the quarters to come.
Broad-based Growth for Automation Supplier Revenues
Compared to the first quarter of 2017, the total combined revenues of automation suppliers to both the process and discrete manufacturing industries grew by 7.7 percent (see Figure 2). Process industry suppliers saw their combined revenues grow by 10.2 percent; while suppliers to the discrete industries saw a 6.4 percent increase in combined revenues. GE Power, due to its large size, has an outsized effect on the overall market. If removed from the analysis, discrete revenues would have risen by over 15 percent.
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Keywords: Automation Suppliers, Quarterly Results, Asia-Pacific, Europe, Middle East & Africa, Latin America, North America, ARC Advisory Group.