If compared to the hardware in industrial automation business, the market for SCADA software automation products is expected to grow more in the future.
Which can be the reasons?
This is partly because SCADA products are used mostly in heavy investments related to energy, i.e., gas, oil and power facilities, a segment that is performing better than other industries.
The strong growth of SCADA is due also to the growing number of customers who are aware of the relevance of this kind of software that can improve the efficiency in production lines.
North America is the most relevant market for industrial automation investment and its revenues were the highest globally for SCADA in 2013. The main contributor in this market is the US.
Why America?
The main drivers for growth in America are the investments in the oil and gas industry, as well as the strong local demand of food and beverages. That’s a common feature in the US, Canada and Latin American countries, which do also contribute in part to the oil and gas industry.
What about Europe?
Europe was the second biggest SCADA market in 2013, slightly after America. The big driver here is the strong machinery industry. Germany is the key SCADA user in the region, mainly because of its automotive industry.
With regard to Russia and the Middle East, these countries are the most relevant in gas and oil production, which is suffering the price decrease of crude oil. This price decrease is lowering the investment opportunities. Europe as a whole is slowly leaving the recession behind. Tight tax policies and difficult credit conditions in several countries, industrial oversupply and relatively weak demand from exports, do not suggest a strong recovery in the region for the short term.
China slows down
Asia-Pacific, one of the fastest growing regions in recent years, is experiencing a strong slowdown. China is the mean reason for this. The Chinese leadership has identified financial stability as most relevant goal. Hence, many investments have been delayed and growth in Asia has been lower in 2013. However, Asia shows the higher expansion in the world yet, due to its small income base and many investment opportunities. Investment in the industry galore, particularly related to home consumption, such as food, beverages, water and wastewater.
Japan is also a key country in Asia. From 2012, the Japanese government is boosting an ambitious economy plan by means of tax incentives, currency flexibility and structural reforms. However, if measured in US dollars, the market was growing less in 2013 because the currency had devalued a 10% against the US dollar.