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Posted On: 05/19/2004

Monitoring and cogeneration to drive growth in electric power equipment

"World Electric Power Equipment," a new study from The Freedonia Group Inc., a Cleveland-based industrial market research firm, reports that the heightening use of electric machinery, automation systems, computers, security systems and other sensitive electronic equipment will bolster sales of products such as advanced switchgear systems and power circuit breakers capable of controlling and monitoring incoming electric power. High voltage transformers, traditionally almost exclusively used by utilities, will become more common in the industrial market as a result of cogeneration, especially in industrialized nations. The Asia/Pacific region is projected to register the strongest gains in electric power equipment demand through 2008 among all regions by a significant margin.

World transmission and distribution electric power equipment demand is forecast to rise 4.5% per year through 2008 to $85.7 billion. The largest regional markets for electric power equipment will remain the Asia/Pacific region and North America, with Western Europe also important. While the main product categories -- transformers, switchgear and switchboard apparatus -- will register similar gains, certain products within these categories will perform more favorably than others.

The Asia/Pacific region is home to more than 55% of the world's population, with a sizable portion of these people currently living in rural areas often devoid of electricity. Robust economic growth in developing countries such as China and India, combined with rapid urbanization and growth in infrastructure spending for roads and electricity, will work to boost demand for electric power equipment. The developed Japanese market, however, will continue to register below world-average gains through 2008.

The North American and West European markets will both perform below the global average. Both regions have relatively large and mature markets for electric power equipment. In Western Europe, growth in electric power equipment demand will be further hampered by negligible gains in population levels through 2008. However, another major blackout in these developed regions, such as the one that affected parts of the United States and Canada in 2003, could change this forecast, as consumer fears would force significant upgrades in national systems.