2020 was an exceptionally bleak year for the pneumatic actuator market as the COVID-19 pandemic adversely affected the market’s key consumer industries. One of the worst-affected sectors by the pandemic was the transportation sector, which accounts for around a third of total global pneumatic actuator sales.
The value share of the transportation sector in the pneumatic actuator market was $4.88 billion of a total global market value of $14.42 billion in 2020. In several ways, this sector continues to bear the brunt of the second, third and fourth waves of the pandemic since the pandemic and associated restrictions have reduced inter and intra-country travel, besides also affecting movement of certain goods.
Additionally, the economic impact of the pandemic has affected other key consumer industries such as manufacturing and mining. While the overall drop in consumption has affected manufacturing and left several industrial production lines idling, the regulations over social distancing in several countries has led to a drop in overall mining output.
These developments have proven significant for the market since mining accounted for $3.43 billion worth of sales of pneumatic actuators in 2020, while another $2.1 billion worth of consumption of pneumatic actuators came as a result of industrial automation being undertaken in production lines. However, as macro-economic factors have witnessed an improvement, optimism that the pneumatic actuator market will return to its previous growth trajectory has become more commonplace.
Future Growth Projections and Demand Shifts
Given that transportation, industrial automation and mining accounted for around 75% of sales of pneumatic actuators, the recovery of these sectors is slated to have a major impact on the market.
Given their estimated recovery curve, the pneumatic actuator market is slated to grow at a CAGR of 5% over the next 10 years (1% higher than the CAGR of the 4% recorded in the previous five years). The key reason for this increase is attributed to increasing applications of both rack and pinion type and scotch yoke type pneumatic actuators in existing consumer industries.
Currently, sales of rack and pinion type pneumatic actuators account for $4.6 billion worth of sales, while scotch yoke type pneumatic actuators account for $9.8 billion.
Increasing adoption by smaller units and players is also slated to fuel the market’s growth. However, the impact of this is likely to be asymmetrical, as smaller consumers have shown a clear preference for light duty pneumatic actuators.
As a result, the sales of light duty pneumatic actuators is expected to increase manifold, and the existing gap between sales of light duty and heavy-duty pneumatic actuators is expected to grow.
However, the key to these growth projections is recovery in macroeconomic factors and indexes. Growth projections for the pneumatic actuator market are positive in more than 20 countries over the next 10 years. Of these countries, the markets in the United States, Germany, China and India are estimated to be the most lucrative.
At the same time, it is being observed that this recovery is moving at a different pace in different regional segments. Thus, the market’s growth rate in the different regional segments is likely to differ.
Europe’s Recovery Sends Positive Signs
With European economies opening up and recovering from the pandemic, Europe’s pneumatic actuator market is likely to see rapid growth in the near future. Notably, the West European segment is the largest regional segment for the market and was valued at $4.4 billion in 2020.
Key countries in Western Europe that the market is looking at keenly include Germany, France and the U.K. Major developments in this region are expected to center on an overhaul in technology in the transportation sector. Additionally, return of post-lockdown industrial activity is also likely to increase pneumatic actuator sales.
Logistics & Manufacturing Sector to Drive North American Sales
The North American regional segment of the pneumatic actuator market was valued at $3 billion in 2020. This segment is mainly centered on the United States, which accounted for around 75% of the region’s market share. Within the United States, the logistics sector, which accounts for nearly 8% of the country’s gross domestic product (GDP), is the leading consumer of pneumatic actuators, followed by industrial manufacturing.
While the logistic sector had remained strong despite the pandemic thanks to avoidance of extensive lockdowns, industrial manufacturing took a substantial hit due to macroeconomic factors and supply-side shortages of raw materials, including technology-related raw materials. The shutdown of the country’s automobile manufacturing units was a major setback for the pneumatic actuators market.
However, these disruptions are now easing due to the United States’ economic recovery. This recovery is a combination of a slowdown in the virus’ spread (in part due to the country’s robust vaccination program) and economic policies of the newly installed government of President Joe Biden.
While several industry players have voiced concerns over Biden’s social welfare-oriented programs, these concerns are considered unwarranted for the pneumatic actuator market since the injection of stimulus packages in the economy are estimated to increase the demand for pneumatic actuators in the coming years.
Asia-Pacific Remains a Mixed Bag
The Asia-Pacific region is sending mixed signals for the market, since China is considered more-or-less out of the pandemic—and was the only major economy to grow in 2020—but other key national markets, like Japan and India, continue to reel under the pandemic socially and economically. The Asia-Pacific Except Japan (APEJ) segment of the pneumatic actuator market was valued at $3.3 in 2020 and is estimated to be the fastest-growing market over the next 10 years. Japan accounted for another $1 billion worth of sales in 2020.
Growth in the APEJ market is premised upon growing economies of China, India and South East Asian nations, and the region is estimated to overtake other regional segments in the long run.
Consumption of pneumatic actuators is estimated to grow due to a rapidly expanding transportation sector in the region, as well an increasing automation in manufacturing processes. The estimates of growth gain further traction from the economic center of gravity shifting from the West to the east.
However, given that these countries are estimated to follow varying rates of economic recovery, the short-term growth prospects for the pneumatic actuator market vary from country to country despite the overall increasing robust growth rate expected over the next ten years.
Mining & Offshore Activities
The Latin American ($623 million) regional segment and the Middle East and Africa segment ($427 million) of the pneumatic actuator market trail other regional segments by a substantial margin. But these regions have huge mineral and offshore reserves. Mining of these reserves is a process that is increasingly adopting newer technology tools, which presents a huge opportunity for the market.
Notably, the consumption of pneumatic actuators for offshore activities in 2020 was worth $1.1 billion of the total market value of $14.2 billion. Thus, growth estimates for these regions too remain robust as the demand for resources continues to remain high amid a rapid increase in the global population.
A Reversal is Around the Corner
While the effects of the COVID-19 pandemic continue to ail the pneumatic actuator market, this impact is a temporary disruption in an otherwise steady growth trajectory. As a result, the pneumatic actuator market is expected to make a comeback soon and a turnaround in its fortunes is just a matter of time.
This comeback is, however, contingent on various factors that are being realized differently in different parts of the world. This makes the growth of the pneumatic actuator market a staggered process, and it is important for key players in the market to know short-term, medium-term and long-term market developments to correctly leverage this growth potential.
Nikhil Kaitwade heads the Industrial Automation domain at ESOMAR-certified market research and consulting firm Future Market Insights (FMI). The firm is headquartered in Dubai, with offices in the U.S., U.K. and India. The insights presented in this article are based on a report by FMI on the pneumatic actuator market.
