When I reasoned why the manufacturing sectors served by industrial lasers were outperforming analysts' forecasts, I was slightly hesitant to talk about it. I had been stung before in 2008 when I came away from EuroBlech in October touting the optimistic forecast of the fabricating metals sector only to be rudely shocked into reality as that industry collapsed in December of that year as the great recession of 2009 took hold.
But today the industries that exhibit fertile ground for growth in industrial laser processing - energy, transportation, medical devices, fabricated metal products and aerospace - are now acknowledged by even the most jaded analysts as solid factors in positioning manufacturing as an economic leader in an otherwise down market. And by extension these industries are a strong contributor to the record 2011 growth of industrial laser revenues.
However, once stung - forever wary, and I reacted to the beginnings of some less than enthusiastic forecasts by showing caution in my 2012 market forecast, which those of you who are digital subscribers will read on January 15th and others will read online at www.industrial-lasers.com the next week.
But now, as this is being written, a raft of new information is appearing that suggests that manufacturing, at least in the US, is in for a more active period than anticipated. The Institute for Supply Management cued by a strong December growth in manufacturing suggests that the first half of 2012 should be very good for US manufacturing and in fact 11 of 18 US manufacturing industries will expand in the first 6 months of the year, including those that drove the 2011 market to new highs. Furthermore, 3 of our market drivers are forecast to expand for the entire year.
The Association for Manufacturing Technology and I were on the same track, and they cautiously forecast a positive outlook for 2012. IHI Global Insight was more positive, saying that a 2012 recession was unlikely.
Globally, the picture was not as clear and The Washington Post hedged on the US situation, as seen by surveyed economists, as possibly threatened by the situation in Europe, an issue that I factored into my forecast.
Right now, things look bright in the industrial laser sector at least for the first two quarters. Even problems in solar seemed to be easing as expansion in South America is set to grow this year. So sit back and enjoy 2012, at least the first half, and hope that it is strong enough to offset any potential decline later in the year.
Thursday, January 5, 2012
Tuesday, December 20, 2011
"Non-conventional" industry breaks 2008
It won’t be long before that bearded guy in the red suit will be making his annual appearance and right behind him that little kid in the diapers that welcomes the new year. You’ll pardon me if I protest that it seems like yesterday when they showed up last year, my how time flies.
I just finished my PowerPoint for the late January "Marketplace for Lasers & Photonics" meeting in San Francisco (www.marketplaceseminar.com) and have been making a last review of the numbers. Each year I cut it closer and closer to the deadline for submission of this file as I massage the final 3rd quarter numbers that continue to come in. For example, I've received changes in the financials of companies that suffered losses as a result of the flooding in Thailand, II-VI Corp. was one of the more notable ones.
As a little Christmas gift, I’ll give you a hint of what will be disclosed in my forthcoming report in 2011. Sales revenues for industrial lasers (almost $2 billion) and systems (more than $7 billion) broke the 2008 records by 11%, wiping out the losses of the recession a year ahead of what the industry expected.
Historically, since 1970, the year I date as the beginning of industrial laser sales, more than a half million lasers have been sold – valued at close to $22 billion – which were integrated into systems worth more than $75 billion – for a CAGR of 17%. Not bad for an industry that was labeled, in it’s early years, as "non-conventional" by statisticians. In fact, last time I looked, laser machines represented about 10% of total world machine tool sales.
And as I will report in the new year, even with some cooling-off in the markets, industrial lasers and systems should grow another 5% in 2012
So, Happy Holidays to all and see you in 2012.
I just finished my PowerPoint for the late January "Marketplace for Lasers & Photonics" meeting in San Francisco (www.marketplaceseminar.com) and have been making a last review of the numbers. Each year I cut it closer and closer to the deadline for submission of this file as I massage the final 3rd quarter numbers that continue to come in. For example, I've received changes in the financials of companies that suffered losses as a result of the flooding in Thailand, II-VI Corp. was one of the more notable ones.
As a little Christmas gift, I’ll give you a hint of what will be disclosed in my forthcoming report in 2011. Sales revenues for industrial lasers (almost $2 billion) and systems (more than $7 billion) broke the 2008 records by 11%, wiping out the losses of the recession a year ahead of what the industry expected.
Historically, since 1970, the year I date as the beginning of industrial laser sales, more than a half million lasers have been sold – valued at close to $22 billion – which were integrated into systems worth more than $75 billion – for a CAGR of 17%. Not bad for an industry that was labeled, in it’s early years, as "non-conventional" by statisticians. In fact, last time I looked, laser machines represented about 10% of total world machine tool sales.
And as I will report in the new year, even with some cooling-off in the markets, industrial lasers and systems should grow another 5% in 2012
So, Happy Holidays to all and see you in 2012.
Monday, November 28, 2011
Enthusiasm and expansion evident at Fabtech 2011
We had early clues that Fabtech International (Chicago, November 14-17) was going to be a success from exhibitors and from the FMA/SME organizers' preregistation numbers. But when the doors opened at McCormick Place, thousands of visitors lined up for badges, and at the opening bell, mobs of determined manufacturing people surged into the North and South Halls, many heading purposely for specific exhibits. And the second day of the show was even more packed than the first.
I was sitting on the mezzanine of the large TRUMPF exhibit as the opening bell sounded. Hordes of visitors could be seen rushing toward the major exhibits that were clustered near the front of the South Hall. Below me in the TRUMPF exhibition area, every system and sales representative were immediately engaged in discussions. The same held true at many other exhibits I could see from my perch.
At the end of the first two days, exhibitors had all met or exceeded past show records, and many were posting sold signs on the equipment on display. Several major exhibitors told me about sales consummated at the show. For example Burke Doar, VP Sales of TRUMPF Inc. said the 12 units booked on the first day was in-line with good show records of the past.
So I set off to ask all the major industrial laser system exhibitors their show experience and their impression of the current year's sales and prospects for 2012. Exhibitor after exhibitor praised the show; expected to have a good, great or record sales year; and looked forward to a continued good, but not great 2012.
These opinions were backed up by solid facts on the strength of key markets: agricultural and heavy equipment, aerospace, transportation and energy. Asked about the fabricated metal job shop sector, most were equally positive about it, even though it has been feeling the pinch of tight bank lending policies which has required some creative financial arrangements on the part of the equipment sellers.
The companies that participate in the annual market survey I conduct all modified the conservative estimates they made at the beginning of the year. It looks like the North American sheet metal system sales for 2011 will be about 725 units, a number equal to the very good pre-recession year of 2001.
So how to explain this excellent performance of the laser cutting system suppliers in light of all the negative media comments on the state of manufacturing in North America? I received a number of explanations, but the one that seemed most factual was that the industries served by laser cutting systems were not experiencing market problems, and buyers of capital equipment had the resources to expand their business, even in what seems to be a shaky economy. Yes, I heard that some buying decisions were made after long deliberations, but in the end these buyers were betting that the manufacturing market had a positive future.
Fabtech 2011 was a great show. As this was being written we still had not received the official show attendance figures. Exhibitors left with good feelings about near-term prospects, and visitors were upbeat about their business prospects. Counter to prevailing sentiment among the economists, yes, but I could not find weaknesses in the market forecasts we heard.
Posted by David Belforte
I was sitting on the mezzanine of the large TRUMPF exhibit as the opening bell sounded. Hordes of visitors could be seen rushing toward the major exhibits that were clustered near the front of the South Hall. Below me in the TRUMPF exhibition area, every system and sales representative were immediately engaged in discussions. The same held true at many other exhibits I could see from my perch.
At the end of the first two days, exhibitors had all met or exceeded past show records, and many were posting sold signs on the equipment on display. Several major exhibitors told me about sales consummated at the show. For example Burke Doar, VP Sales of TRUMPF Inc. said the 12 units booked on the first day was in-line with good show records of the past.
So I set off to ask all the major industrial laser system exhibitors their show experience and their impression of the current year's sales and prospects for 2012. Exhibitor after exhibitor praised the show; expected to have a good, great or record sales year; and looked forward to a continued good, but not great 2012.
These opinions were backed up by solid facts on the strength of key markets: agricultural and heavy equipment, aerospace, transportation and energy. Asked about the fabricated metal job shop sector, most were equally positive about it, even though it has been feeling the pinch of tight bank lending policies which has required some creative financial arrangements on the part of the equipment sellers.
The companies that participate in the annual market survey I conduct all modified the conservative estimates they made at the beginning of the year. It looks like the North American sheet metal system sales for 2011 will be about 725 units, a number equal to the very good pre-recession year of 2001.
So how to explain this excellent performance of the laser cutting system suppliers in light of all the negative media comments on the state of manufacturing in North America? I received a number of explanations, but the one that seemed most factual was that the industries served by laser cutting systems were not experiencing market problems, and buyers of capital equipment had the resources to expand their business, even in what seems to be a shaky economy. Yes, I heard that some buying decisions were made after long deliberations, but in the end these buyers were betting that the manufacturing market had a positive future.
Fabtech 2011 was a great show. As this was being written we still had not received the official show attendance figures. Exhibitors left with good feelings about near-term prospects, and visitors were upbeat about their business prospects. Counter to prevailing sentiment among the economists, yes, but I could not find weaknesses in the market forecasts we heard.
Posted by David Belforte
Thursday, November 10, 2011
ICALEO more international than ever
This comment on the recent ICALEO held in Orlando is being written rather tardily as I am just now recovering from the 7-day power outage in my area brought on by the ravages of what is now being called THE October Northeaster, not with any fondness.
ICALEO 2011 was, judging by attendee comments, a very successful event, with 523 registered for the Congress with 51% coming from the US. Attendance was up 12.5% from last year's event in Anaheim. 262 papers and posters were presented in several concurrent sessions, a decrease of 6%over last year. Of the papers presented 82% were by international authors, a situation that caused considerable talk among long-time attendees. Some Program Committee members attribute the limited papers from the U.S to restrictive non-disclosure arrangements imposed by US research sponsors preventing this work from being shared.
On the other hand, ICALEO is as, the name says, international, and the organizers, the Laser Institute of America, has become an international society, so a diverse membership and subsequent diversity in conference presenters is a natural consequence.
Five ILS Editorial Advisors attended this year's event along with me, which made coverage of concurrent sessions and the micro (LMF) and macro (LMP) conferences easier. Their thoughts are incorporated in this conference perspective.
The large discrepancy in paper sources is seen as both a plus and minus, with one advisor commenting that a large number of papers from Germany was "a delight," while another remarked that only 18% of papers were US-originated and that some of these were from authors working for foreign companies. The two conference program committees were actually about evenly split in terms of domestic versus international membership so one can’t find obvious prejudice in author selections with them.
Several advisors sensed the lack of US papers and assigned the blame, in part, on the US government, which, as one said, "has never been able to devise and implement a complex action plan to support industrial research." Another noted that, "Someone needs to lead a credible lobbying effort to find federal funding to help US companies apply laser technology to compete with similar efforts in Europe."
To most observers, this year's ICALEO was slanted toward solid-state laser applications with fiber and disc lasers making up two-thirds of the macro (LMP) sessions, of which 2/3rds were fiber related and 1/3rd disc. The papers featuring disc lasers were mostly from Germany and the ratio of fiber to disc was 3:1. In the micro (LMF) conference, 40% of the papers featured ultra-fast pulse (ps and fs) laser applications and the remainder were ns lasers (36%) and long pulse (24%).
The conclusion one can draw from the preponderance of solid-state applications in the papers would be that most of the advanced laser material processing work being done today is with these lasers as opposed to the CO2 laser, which, while being used in more mature applications, commercially dominates annual sales: about 50% of 2011 revenues.
ILS picked up on this trend several years ago and has been featuring applications with fiber, disc, and UFP lasers in many issues.
ICALEO 2011 was, judging by attendee comments, a very successful event, with 523 registered for the Congress with 51% coming from the US. Attendance was up 12.5% from last year's event in Anaheim. 262 papers and posters were presented in several concurrent sessions, a decrease of 6%over last year. Of the papers presented 82% were by international authors, a situation that caused considerable talk among long-time attendees. Some Program Committee members attribute the limited papers from the U.S to restrictive non-disclosure arrangements imposed by US research sponsors preventing this work from being shared.
On the other hand, ICALEO is as, the name says, international, and the organizers, the Laser Institute of America, has become an international society, so a diverse membership and subsequent diversity in conference presenters is a natural consequence.
Five ILS Editorial Advisors attended this year's event along with me, which made coverage of concurrent sessions and the micro (LMF) and macro (LMP) conferences easier. Their thoughts are incorporated in this conference perspective.
The large discrepancy in paper sources is seen as both a plus and minus, with one advisor commenting that a large number of papers from Germany was "a delight," while another remarked that only 18% of papers were US-originated and that some of these were from authors working for foreign companies. The two conference program committees were actually about evenly split in terms of domestic versus international membership so one can’t find obvious prejudice in author selections with them.
Several advisors sensed the lack of US papers and assigned the blame, in part, on the US government, which, as one said, "has never been able to devise and implement a complex action plan to support industrial research." Another noted that, "Someone needs to lead a credible lobbying effort to find federal funding to help US companies apply laser technology to compete with similar efforts in Europe."
To most observers, this year's ICALEO was slanted toward solid-state laser applications with fiber and disc lasers making up two-thirds of the macro (LMP) sessions, of which 2/3rds were fiber related and 1/3rd disc. The papers featuring disc lasers were mostly from Germany and the ratio of fiber to disc was 3:1. In the micro (LMF) conference, 40% of the papers featured ultra-fast pulse (ps and fs) laser applications and the remainder were ns lasers (36%) and long pulse (24%).
The conclusion one can draw from the preponderance of solid-state applications in the papers would be that most of the advanced laser material processing work being done today is with these lasers as opposed to the CO2 laser, which, while being used in more mature applications, commercially dominates annual sales: about 50% of 2011 revenues.
ILS picked up on this trend several years ago and has been featuring applications with fiber, disc, and UFP lasers in many issues.
Wednesday, November 2, 2011
The weather outside is frightful
In this spot was intended to be a report on ICALEO 2011 by the Industrial Laser Solutions Editorial Advisors and me, but Mother Nature played a dirty trick on most of southern New England. She dropped an historic, for October, snowfall (12-18 inches) that coated the fully-leaved trees, causing severe damage to the trees and subsequently to the power lines. This is being written from my car, where I have cruised central Massachusetts looking for WiFi to connect with.
So just a brief note to say power is off, but when it returns, a full report on ICALEO will be posted.
So just a brief note to say power is off, but when it returns, a full report on ICALEO will be posted.
Wednesday, October 12, 2011
In Japan, the sun also rises
I arrived in Tokyo two weeks ago to find a country recovering from the most recent of two major coastal typhoons that added to the already lingering after-effects of a serious earthquake and the resulting tsunami that devastated the country's power supply.
My visit was centered on Yokahama, the largest port, which did not experience any direct damage but like all of the Kant? Plains area was still under tight government restrictions on power usage. To a guest at a first-class hotel, the only visible signs of any problems were a raised air conditioning temperature and the lowering of lighting in public spaces. I am sure that behind the scenes of a well-run hotel, the problems were greater, but they managed to keep these from affecting guests.
At the Pan-Pacific Exhibition complex, the same power requirements were also in place and other than a slightly discomforting higher temperature in the halls and conference rooms one would not know that the country was in a recovery mode. The most visable tip-off was the general absence of ties worn by visitors, a distincly non-Japanese dress mode occasioned by the working envirornment temperatures.
I came here to partcipate and speak at LaserTech 2011, one of four co-located exhibits featuring complementary laser technology and products. The organizers said they came close to 12,000 attendees, exceeding their forecasted 10,000. Was this a sign that the Japanese economy was taking an upward turn after years of being depressed? It’s hard to say as this was very much a domestic show with all exhibits signs in Japanese, and for the most part, exhibits were staffed by Japanese-speaking marketing and sales people so surveys of exhibitor satisfaction were hard to obtain. I judged the continuous activity at exhibits adjacent to mine as an indication that business prospects among the attendees were good.
One of my goals on this trip was to learn how Japanese suppliers of industrial laser products survived years of stagnation and the recent disasters. I spoke with managers and officers of both large and small companies and found that their attitude, at least to Westerners, was upbeat. An interesting twist was that the severe goverment restrictions on power usage and the crushing economic climate had caused companies to dramaticaly change their operating procedures. And now that restrictions were easing and the economy was turning up, these same companies intended to keep in place many of the changes forced on them to become, as a result, an even leaner, tighter operating entity. Basically they said they learned they could operate comfortably with reduced energy and other restrictions. As one CEO said to me, "It was a tough learning experience."
My visit was centered on Yokahama, the largest port, which did not experience any direct damage but like all of the Kant? Plains area was still under tight government restrictions on power usage. To a guest at a first-class hotel, the only visible signs of any problems were a raised air conditioning temperature and the lowering of lighting in public spaces. I am sure that behind the scenes of a well-run hotel, the problems were greater, but they managed to keep these from affecting guests.
At the Pan-Pacific Exhibition complex, the same power requirements were also in place and other than a slightly discomforting higher temperature in the halls and conference rooms one would not know that the country was in a recovery mode. The most visable tip-off was the general absence of ties worn by visitors, a distincly non-Japanese dress mode occasioned by the working envirornment temperatures.
I came here to partcipate and speak at LaserTech 2011, one of four co-located exhibits featuring complementary laser technology and products. The organizers said they came close to 12,000 attendees, exceeding their forecasted 10,000. Was this a sign that the Japanese economy was taking an upward turn after years of being depressed? It’s hard to say as this was very much a domestic show with all exhibits signs in Japanese, and for the most part, exhibits were staffed by Japanese-speaking marketing and sales people so surveys of exhibitor satisfaction were hard to obtain. I judged the continuous activity at exhibits adjacent to mine as an indication that business prospects among the attendees were good.
One of my goals on this trip was to learn how Japanese suppliers of industrial laser products survived years of stagnation and the recent disasters. I spoke with managers and officers of both large and small companies and found that their attitude, at least to Westerners, was upbeat. An interesting twist was that the severe goverment restrictions on power usage and the crushing economic climate had caused companies to dramaticaly change their operating procedures. And now that restrictions were easing and the economy was turning up, these same companies intended to keep in place many of the changes forced on them to become, as a result, an even leaner, tighter operating entity. Basically they said they learned they could operate comfortably with reduced energy and other restrictions. As one CEO said to me, "It was a tough learning experience."
Tuesday, September 20, 2011
Looking to The Rising Sun for answers
I'm preparing for a trip to Japan next week where I will be presenting my mid-year report on the industrial laser marketplace. Because my PowerPoint slides will be shown in Japanese, they were submitted for translation several weeks ago, and therein lies a conundrum- present what I had prepared or, because the market seems to be leaning more towards a slow-down, extemporize – possibly causing the simultaneous translator a migraine.
For months I have reported the strength of the markets served by industrial lasers and touted their ability to overcome downward adjustments that all the experts were predicting. And I still believe this, even though daily news shows softness developing in some of the market stalwarts that have kept sales and revenues at a high level.
At this point in time, the laser system supplier’s books are, for the most part, full for 2011, with backlogs in place into the early weeks of 2012. By all accounts these orders seem secure and I have yet to hear of concerns about cancellations or shipment delays.
My colleague, Dr. Tom Hausken of Strafegies Unlimited, reports that a round of recent West Coast corporate interviews confirmed the "jobless recovery" scenario, seemed to show some market uncertainties and expected flat sales for 2012. Tom and I share a lot of data and therefore I tend to listen more attentively to what he says, even though we have been known to object to each other's conclusions at times. So I'll file away his notes for consideration as I start my 2011 annual report in November.
One thing I intend to discuss with executives of Japanese companies I will meet with next week is how they survived the recent 10 year economic stagnation in Japan. The idea of a similar situation in the U.S. has been floated by some economists and I intend to see how such an occurrence might impact the dynamic laser market.
Stay tuned for my Japan report in a couple of weeks.
For months I have reported the strength of the markets served by industrial lasers and touted their ability to overcome downward adjustments that all the experts were predicting. And I still believe this, even though daily news shows softness developing in some of the market stalwarts that have kept sales and revenues at a high level.
At this point in time, the laser system supplier’s books are, for the most part, full for 2011, with backlogs in place into the early weeks of 2012. By all accounts these orders seem secure and I have yet to hear of concerns about cancellations or shipment delays.
My colleague, Dr. Tom Hausken of Strafegies Unlimited, reports that a round of recent West Coast corporate interviews confirmed the "jobless recovery" scenario, seemed to show some market uncertainties and expected flat sales for 2012. Tom and I share a lot of data and therefore I tend to listen more attentively to what he says, even though we have been known to object to each other's conclusions at times. So I'll file away his notes for consideration as I start my 2011 annual report in November.
One thing I intend to discuss with executives of Japanese companies I will meet with next week is how they survived the recent 10 year economic stagnation in Japan. The idea of a similar situation in the U.S. has been floated by some economists and I intend to see how such an occurrence might impact the dynamic laser market.
Stay tuned for my Japan report in a couple of weeks.
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