No “snapback” yet; automation industry remains stable
Control system integrators continue to wait for a much anticipated reacceleration in the operating environment, according to results of a recent survey of Control System Integrator Association (CSIA) members conducted by J.P. Morgan.
After a steady slide in order momentum that began in mid-2012, system integrators were optimistic that delayed projects come back on the board at some point in 2013. Signs of stabilization began to appear late in 2012, but a "snapback" has yet to materialize.
"This looks to us like a gradual improvement, but still not a wholesale release of pent-up demand," said C. Stephen Tusa, Jr., CFA, J.P. Morgan Securities, LLC.
According to the survey results, anticipated growth goes from the 2% to 3% range to the 4% to 5% range over the next year, a degree of acceleration greater than implied in the December survey of CSIA members.
"The good news is we do not see any signs of incremental deterioration. This dynamic reinforces what we heard from our trip to the Hanover Fair, where weakness is isolated to a few pockets regionally and by end market," Tusa said.
Strongest end markets for system integrators are auto, oil and gas, power and energy, and industrial OEMs. Water/wastewater, building automation and defense remain weak.
J.P. Morgan surveys CSIA members twice a year to gauge demand for automation products and services. "System integrators are a crucial link in the sales channel of automation-related equipment, with a focus on capital projects that require a high degree of technical engineering," said Bob Lowe, executive director of CSIA.
The next survey will be conducted in September 2013.
CSIA is a not-for-profit, global professional association that seeks to advance the industry of control system integration. www.controlsys.org