Market Trends of Process Automation and Instrumentation Industry
This section covers the major market trends shaping the Process Automation & Instrumentation Market according to our research experts:
Oil and Gas Industry to Hold Significant Market Share
- As the oil and gas industries process a variety of hazardous substances that are also exposed to harsh environments and operational environments, any explosions or catastrophic event can endanger the safety of humans and the environment. Process automation and instrumentation provide monitoring and control essential for ensuring human resources' safety and compliance with environmental regulations. When integrated into automation systems, processing instruments, such as smart control valves, also helps manufacturers increase productivity and product consistency by delivering continuous data regarding end-product quality and process efficiency.
- Furthermore, in the oil and gas industry, protecting a pressurized pipeline from corrosion and leaks and minimizing downtime are among the crucial responsibilities of the industry. According to the NACE (National Association for Corrosion Engineers), the oil and gas industry suffers a cost of over USD 1.6 billion per year due to corrosion alone. The presence of oxygen in the gas sample determines that there is a leak in the pressurized pipeline system. The adoption of advanced process control and automation instrumentations, along with analytical instruments, can help the operators significantly reduce this cost.
- Furthermore, advanced automation can significantly reduce energy utilization in all areas of the oil and gas industry, including process units, utilities, and offsite units. Energy is the single largest controllable cost for most oil and gas refineries, often comprising more than 50% of non-crude operating expenses. Further, the increase in operational costs has caused most refineries to look even more closely at their energy utilization, creating growth opportunities for the studied market.
- The increasing global consumption of oil and gases are driving oil-producing companies to increase their production and investment to explore new oil fields and extraction zones which is expected to create a supportive growth environment for the studied market. According to the IEA, the global demand for crude oil is expected to reach 104.1 million barrels per day by 2026, from 91 million barrels per day in 2020.
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North America is Expected to hold a Significant Market Share
- North America is one of the largest global markets for process automation and instrumentation. The United States is renowned for its innovation capabilities and is at the forefront of prominent developments surrounding the emerging technologies of the Fourth Industrial Revolution. New-found shale resources in the United States, and an increasing number of oil and gas projects in Canada, are additional indicators of the market potential.
- For instance, the Canadian Association of Energy Contractors (CAOEC) organization, which represents Canada's oil and gas drilling sector, expects more activity in 2023. The organization expects 6,409 wells to be drilled in Canada in 2023, an approximately 15% increase from 2022. As process automation and instrumentations, such as control valves, PLCs, etc., are widely used in upstream, downstream, and midstream activities, such trends are expected to support the studied market's growth.
- Industrial automation in the North American region, especially in the United States, is expected to exhibit strong growth, as the recent government initiatives to push the local industries amid its ongoing disputes with China are expected to favor the growth of the manufacturing sector in the country. This is evident from the growing investment in industrial robots and other automation technologies. For instance, according to the Association for Advancing Automation (A3), during the period January to September 2022, North American companies purchased 35,804 units of industrial robots, valued at USD 1.875 billion, up 24% for ordered units and 27% for revenue over the same period in 2021.
- For seeking the growth opportunity with a rapid increase in the adoption of process automation solutions, companies in the region are continuously expanding their presence and product portfolio for the studied market. For instance, in August 2022, FANUC America, a supplier of CNCs, robotics, and ROBOMACHINEs, announced an expansion of its West Campus that would expand its operational space in Oakland County to nearly about two million square feet. According to the company, the expansion plan involves the construction of a 655,000-square-foot facility to house manufacturing, R&D, and engineering projects.
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