Tim has over 20 years’ experience in technology market intelligence with expertise across a broad range of industrial automation technologies and industries. Tim is now Senior Research Director and Principal Analyst for the Interact Analysis Industrial Technology team, using his considerable experience to develop best-in-class research for the manufacturing sector.
In November 2019, Interact Analysis published its report which analysed prospects for the motion control market. This report gave reasons for optimism within the sector, predicting steady growth after a poor 2019. Then COVID-19 hit, and much of that optimism disappeared, as it has for a wide range of industrial sectors across the globe.
As a result of this fundamental difference in outlook, we used our updated (8th May) Manufacturing Industry Output (MIO) Tracker forecasts and other data sources, including our partners at ITR Economics, to revise our predictions for the motion control market. Whilst the CNC segment is predicted to be hit hardest, declining by -24.7% in 2020, we expect the much larger GMC sector to suffer a smaller hit, declining by -7.5% in 2020. Beyond that, predictions are reasonably optimistic for the next year or two. Both sectors are expected to take an upward trajectory into 2021 before slowing (or declining slightly in the case of CNC) in 2023 – but the depths plumbed in 2020 will not be revisited.
Let’s have a look at the reasons for this variation in performance.
The GMC market – Wide application range fosters built-in sustainability
GMC servo motors and servo drives have a wide range of applications. They are commonly found in food and beverage machinery, packaging machinery, material handling equipment and semiconductor & electronics machinery, for example.
Food & beverage machinery is predicted to undergo a small contraction globally of -0.85% in 2020. The demand for food rarely falls, even in times of global shock. COVID-19 may cause supply-side issues, but these are expected to be short-lived. The sector may see changes, though. We anticipate food security becoming more of an issue, prompting reshoring of some food and beverage machinery production.
Packaging machinery is used across many industrial sectors, but is strongly linked to the food and beverage industry. Hence, we expect a similar trajectory to the food and beverage machinery sector. That is to say, it will ride the storm. Our MIO Tracker predicts that India and Italy will see the largest contractions in this sector in 2020, -4.6 and -4.2% respectively, but most major regions will either flatline on 2019 figures, or dip only slightly.
Material handling equipment, like packaging machinery, is another multi-industry sector. Our research into logistics and warehouse automation predicts a strong uptake for material handling equipment in these areas. The market will dip in 2020, but all the top 10 regions are expected to recover by the end of 2021.
The semiconductors & electronics machinery sector historically experiences a cyclical boom and bust trajectory, with periods of high highs and low lows. This cyclical market pattern arises from the fact that the machinery is expensive, is ordered well in advance, and becomes outdated very quickly. We expect to see global growth of 1.7% in this sector in 2020. This is a dip of about 6% from our pre-COVID predictions, but we expect significant growth over the next 5 years, with China having the highest CAGR, at 8.8%.
These are 4 major sectors using GMC equipment, but there are many more. Market strength comes from the versatility of the product. It is not dependent on a limited number of application scenarios. Unfortunately, the same thing cannot be said regarding the CNC market.
The CNC market – A narrow range of applications, hit harder by COVID-19.
The CNC motion controls market is highly dependent on the machine-tools industry. Notably the areas of metal cutting and metal forming. This is the sector which has taken the biggest hit during the COVID-19 crisis. Machine-tools service industries that traditionally fare badly in economic crises, and COVID-19 is more than just an economic crisis. Two huge sectors which widely use machine-tools – aerospace and automotive – have been almost completely shut down. Interact Analysis predicts a 2020 decline of nearly thirty-percent globally for the machine tools industry. We anticipate few of the major machine tool producing regions will come close to 2019 levels in the next 5 years.
From a geographical perspective, the Japanese, German and Italian markets are expected to see the biggest contractions in 2020. Though we will see some recovery in the machine tools sector in the next 5 years, there are new longer-term challenges. These include the inevitable growth of the electric vehicle industry, which requires significantly reduced tooling, and the increase in additive manufacturing, which as a competitive technology to machine tools has the potential to impact. It is therefore clear that the industry is at a potential turning point in its future evolution.
Motion Control in China – Good reason for optimism
Tragically for that country, China led the way as COVID-19 took a grip on the planet. But China has also led the way in successfully controlling and suppressing the pandemic and bringing life back to something approaching normality. This also applies in the manufacturing sector, with most factories getting back to, or close to, pre-COVID-19 production levels.
In 2019, the Chinese market represented nearly a quarter of global motion control revenues. But Interact Analysis’s Manufacturing Industry Output (MIO) Tracker has estimated that in normal times China accounts for over 42% of global machinery production. This implies that where the motion control market in China is concerned, there remains opportunity for further penetration as factories seek to modernise and employ more automated and flexible equipment. As such, Interact Analysis predicts that the Chinese market will be the fastest growth area for motion controls, as the world struggles to recover from COVID-19.
This is just a snapshot of the Interact Analysis report on the motion control market. The original report was published in November 2019, but the complete dataset and forecasts have been updated to include the impact of COVID-19 (in May 2020).
To continue the conversation with Tim Dawson, our lead motion control analyst, please get in touch with him directly: Tim.Dawson@InteractAnalysis.com