Process Control Instrument Manufacturers

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Industry Structure, How Firms Opertate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Quarterly Insight, Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 740 process control instrument manufacturers in the US produce instruments and devices for measuring, displaying, recording, transmitting, and controlling industrial process variables such as temperature, pressure, flow, viscosity, and concentration. Customers are wide ranging but include manufacturers, distributors, utilities, natural resource extractors, military, and equipment repair services.

Dependence on International Trade

US process control instrument manufacturers are highly dependent on sales to foreign manufacturing markets, which exposes them to foreign currency exchange risks and trade tensions between countries.

Product Obsolescence

The industry rapidly introduces new and improved process control instruments and related technology and services that render older products less effective or obsolete.

Industry size & Structure

A typical process control instrument manufacturer operates out of a single location, employs fewer than 20 workers, and generates about $15 million annually.

    • The process control instrument manufacturing industry consists of about 740 companies which employ about 59,200 workers and generate about $11 billion annually.
    • Customer industries include manufacturers, distributors, utilities, natural resource extractors, military, and equipment repair services.
    • The industry is concentrated with the 20 largest firms representing 59% of industry revenue.
    • Large companies include Emerson, Hayward, Parker Hannifin, and Furness Controls.
                                    Industry Forecast
                                    Process Control Instrument Manufacturers Industry Growth
                                    Source: Vertical IQ and Inforum

                                    Coronavirus Update

                                    May 9, 2022 - China Will Continue With “Zero-COVID” Strategy
                                    • China Vice Premier Sun Chunlan said that the country will continue its “dynamic zero-Covid” strategy “without hesitation or wavering.” Experts say that the strategy favors measures such as mass testing, forced quarantines, and city-wide lockdowns. China has rejected effective mRNA COVID-19 vaccine technology, relying instead on traditional, inactivated vaccines to achieve its 86.6% fully vaccinated rate. Inactivated vaccines are less effective against Omicron and, analysts suspect, China's exclusive use of the old technology is the primary reason why China's borders remain mostly sealed to the outside world. Experts also say that, while President Xi Jinping hoped to minimize the cost of a zero-Covid strategy, this renewed campaign will rapidly and exponentially take a heavy economic toll. It will further suppress exacerbate supply chain disruption, suppress domestic consumption, and encourage the exodus of investors.
                                    • Domestic manufacturers may benefit from pandemic-related factory closures in China. China’s manufacturing output decreased at the sharpest pace in 26 months in April amid escalating COVID-19 lockdowns. The Caixin/Markit purchasing managers’ index (PMI) decreased to 46.0 in April from 48.1 in March. A reading below 50 suggests output is contracting rather than expanding. The rate of decline in manufacturing production was the second steepest since the survey began in early 2004, beaten only by the reduction seen at the initial onset of the pandemic in February 2020.
                                    • The semiconductor shortage will not be as severe in 2022 as it was in 2020 and 2021, according to Ariane Bucaille of consulting firm Deloitte. The shortage will also not affect all chip varieties. Customers were waiting between 20 and 52 weeks in mid-2021 for multiple kinds of semiconductors, according to Bicaille. Those lead times will be closer to 10-20 weeks by the end of 2022, and the industry will be in balance by early 2023. The chips used in process control instruments tend to be basic products such as microcontrollers made under contract at older foundries, not the leading-edge production technology in which chipmakers would prefer to invest.
                                    • The Institute for Supply Management (ISM) projects a 6.5% revenue increase for the manufacturing sector in 2022. The ISM noted in its Semiannual Economic Forecast released in December 2021 that 65% of its respondents expect 2022 revenues to top 2021 revenues, with 15 of the 18 manufacturing sectors tracked by ISM pegged for revenue growth. Manufacturing continues to perform at a strong level, going back to March 2020, with March 2021 being the high point over a 12-month period through November 2021.
                                    • Workers in many industries have been quitting their jobs at high rates in recent months, according to the US Bureau of Labor Statistics, but quitting in manufacturing is not as high as in the low-pay service sectors. It has accelerated, however, as factories race to poach one another’s workers and increase production as supply-chain issues reshuffle the global manufacturing landscape. Nick Bunker, economist at the jobs site Indeed, said the numbers were a reflection of the options workers have in the current economic market, with job openings outnumbering unemployed workers and people reevaluating what they want to do.
                                    • Employment in the process control instrument manufacturing industry increased 1% year over year in March.
                                    • The Federal Reserve expects economic growth to remain above trend for at least two years to come, with GDP growth expected to be 3.3% in 2022 and 2.2% in 2023, compared to estimated long-term potential growth of just 1.8%.
                                    • The federal Equal Employment Opportunity Commission said that employees may be barred from the workplace if they refuse the COVID-19 vaccine. "Requiring a vaccine is a health and safety work rule, and employers can do that," said Dorit Reiss, a professor at the University of California Hastings College of Law. There are, however, some exceptions to a blanket requirement. A collective bargaining agreement may require negotiating with a union before mandating a vaccine. The Americans with Disabilities Act allows workers who don't want to be vaccinated for medical reasons to request an exemption.
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