Demand for industrial valves in the U.S. will rise 4.6% annually to $14.8 billion in 2009, a strong improvement over the 1999 to 2004 performance, according to “Industrial Valves,” a new study from The Freedonia Group. The study says that OEM demand comprises approximately two-thirds of the total market and will be buoyed by an improved outlook for the production of durable goods and capital spending. Much of the gains will occur in the public utilities market, which will benefit from increased capital expenditures by electric utilities and solid growth in waterworks construction.
U.S. producers face strong competition in many standard valve products from manufacturers in low labor cost countries, and in more highly engineered standard and automatic valve products from manufacturers in Western Europe and Japan. By 2009, imports are projected to account for more than half of total U.S. valve demand, up from about 30% in 1994.
Part of the increase has been due to U.S. production moving offshore - particularly to China and Mexico. This trend is expected to continue. Foreign countries, especially Canada and Mexico, represent important markets for U.S. producers, with exports comprising approximately one-third of shipments in 2004. Rapidly industrializing nations in Latin America and Asia are expected to provide good growth prospects.
Public utilities are expected to see the fastest gains of any major valve market, rising 6.5% annually through 2009. These increases will allow this sector to overtake process manufacturing as the largest market for valves in the aggregate. The crude petroleum and natural gas segment of the resource extraction industries will also boast strong growth. Valve demand from the process manufacturing sector is expected to see below average increases of only 2.4% annually, due to weak output and a weakening capital spending outlook.
The 287-page “Industrial Valves” study is available for $4,100 from The Freedonia Group. Contact Corinne Gangloff at 440-684-9600, or e-mail pr@freedoniagroup.com.
