Reports show world NDT market has tremendous growth potential
16/09/2011
The stringent government safety regulations have created a huge demand for NDT inspection services, according to a new report by Research and Markets. This also resulted in an impressive showing during the world economic downturn.The world NDT inspection services market is highly fragmented with significantly high competition. This market is relatively immune from major economic slowdowns and hence presents tremendous growth potential. The market within the new study has been broken down geographically as North America, Europe, Asia Pacific and Rest of the World. The highlights of the major findings within the research will include: restraints, drivers, trends and revenue forecasts, market share analysis and an overview of the competitive structure.
According to the report, the economic crisis of 2008-2009 had a significantly low impact on the world NDT inspection services market. The revenue growth rate decreased, but a negative dip in revenues was not witnessed. A key reason for this was an increase in the scrutiny of government regulations.
The government compelled industries to perform inspections at specific intervals of time.
The recovery from the economic downturn was remarkable, with the market recording a better-than-expected growth rate in 2010. This was mainly due to an increase in NDT inspection demand from the Asian economies, driven by high economic growth.
The power generation segment is likely to provide the maximum opportunity for growth in this market, says the report, as with an increase in energy demand coupled with a drive towards a healthier environment and drying up of non-renewable sources of energy, renewable energy sources, such as wind, solar and nuclear, will witness a gradual increase in demand. A few companies have recognised this opportunity by introducing specialised NDT inspection services for the renewable power generation segment.
Analysts noted some interesting regional trends. Asia Pacific is expected to play an important role in the growth and demand for NDT inspection services during the forecast period. In terms of revenue generation, this region is expected to grow further as demand from key end-user industries, such as manufacturing, oil & gas and power generation, continues to increase.
North America continues to play an important role in terms of revenues for this market. The presence of established end-users, such as oil & gas and process industries, is pivotal to the demand in this region. It is expected to remain the biggest contributor to revenues in this market.
Booming Brazilian market
In another recent market insight report by Frost & Sullivan, the global market for NDT equipment was estimated to be $1.41 billion in 2010 and is expected to grow at a compounded annual growth rate of 3.2%.
Traditionally, North America and Europe have been the primary revenue contributors to this market, however, in recent times, growth has been driven by countries in South America and Asia Pacific. China was responsible for over half the revenues generated in 2010 due to the wide-scale manufacturing activity in progress. Russia, with its vast amounts of oil and natural gas reserves, is expected to be a major contributor, with new equipment being purchased due to increasing demand and replacement of outdated technology. India, too, is expected to be another hub for NDT activity, with a huge increase in the demand for electricity leading to growth in the NDT market.
Of the many countries in South America, Brazil is the fastest growing economy today and is responsible for contributing heavily to the NDT market. The GDP of Brazil is projected to grow at a healthy rate of 5%, despite economic uncertainties. One can almost equate the progress of South America to the progress of Brazil. The Brazilian NDT equipment market was estimated to be around $45.5 million in 2010. With a predicted CAGR of 7%, there is a huge potential in the NDT market. At the heart of this growth are market friendly policies such as equal access to regional markets for non-resident investors as well as the government’s growth acceleration programme (GAP), which promotes investment in infrastructure.
The main drivers of the Brazilian economy are the oil & gas industry, the aerospace and the infrastructure industry, which require heavy investment in NDT equipment. Case in point, the major crude oil producer is Petrobras, which has a reputation for using cutting-edge technology. Brazil’s oil & gas industry is the primary driver for NDT market revenues. The country has the second largest oil reserves in South America, with an estimated 12.6 billion barrels.
Similarly, Embraer is the third largest commercial aircraft company in the world and it contributes a sizeable chunk to the Brazilian equipment NDT industry, apart from providing a fillip to the services industry too. Also, the dominant source of electricity is by means of hydro-electric power, with a substantial 79% of the total electricity generation. With the rising demand in electricity, there have been a number of projects undertaken to increase electricity generation, 70% of which is by means of hydro-electric power.
The report does identify some challenges in the forms of a relatively unskilled labour force and a lack of end-user knowledge with respect to product differentiation.
For further information on the two reports mentioned, visit: www.researchandmarkets.com and www.frost.com
