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Market Insight

A struggling industrial UPS market faces uncertain future

May 31, 2017

Lucas Beran Lucas Beran Principal Analyst, Cloud and Data Center, IHS Markit

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Austin, Texas (May 31, 2017) – The world market for Industrial UPS in 2016 totaled $1.64 billion, which was a mid-single-digit decline from 2015, according to a recent study from IHS Markit. A drop in oil prices had a negative effect on UPS sales into the oil, gas & petrochemical applications – with particular downturns being seen in Africa, Brazil, the Middle East and Russia (all heavily oil-dependent economies.) In those regions, where entire economies depend on oil, IHS Markit saw declining UPS sales across many applications (power, medical and transportation) as government and infrastructure spend waned. In countries or regions with more diversified economies, the decrease in oil prices had a more isolated effect within oil, gas and petrochemical applications. This led to a global Industrial UPS market where revenues from UPS for heavy industrial applications declined by mid-to-high single digits, while light industrial applications declined low-single digits.

IHS Markit defines the market for Industrial UPS, according to its application. This means that regardless of the robustness of a UPS, if it is used in an IT application (computer, server, networking, etc.) it would not be counted in this study, while any UPS backing up light or heavy industrial applications, would be counted. IHS Markit defines heavy industrial applications as UPS used in chemical & processing, military, mining, nuclear, oil, gas and petrochemical, power generation and utilities. Light industrial applications include manufacturing and resources, marine, medical, security, transportation (air), transportation (rail), transportation (other), emergency lighting and other.

Many factors on the horizon are changing the outlook for the industrial UPS market. A Trump administration in the US pushes for a pro-business, America-first economy and looks to de-regulate many industrial markets. OPEC engaged in oil supply cuts in late 2016 and continues to try and stabilize oil prices. Many Latin American countries face their own battles of corruption over state owned oil companies and look to recover from recent economic slowness. Questions remain for the European Union on how Brexit will impact the macroeconomics of not only the UK, but the EU as a whole. And lastly, China looks to continue its shift from a manufacturing-focused economy to a service-minded economy, potentially alternating the global footprint of manufacturing. As all of these market development happen simultaneously, different applications and regions will have different paths and timelines to recovery.

In this study, IHS Markit leveraged its decade plus experience researching the global UPS market, as well as its broad coverage of industrial markets and global economic research. A full assessment of the Industrial UPS hardware market is available from IHS Markit as a standalone report. The Industrial UPS hardware research provides in depth analysis across five major regions: North America, Latin American, Western Europe, Rest of EMEA, Asia, and 27 country level or minor region segmentations. The research is further segmented by nine light industrial applications, seven heavy industrial applications, eight power ratings and product topologies. These statistics are presented for 2016 and forecast through 2021. Supplier market shares and an analysis of the competitive environment are also provided.

For more information, please contact:

Lucas Beran

Research Analyst, Cloud and Data Center Infrastructure

lucas.beran@ihsmarkit.com

+1 512 813 6290

About IHS Markit (www.ihsmarkit.com)

IHS Markit (Nasdaq: INFO) is a world leader in critical information, analytics and expertise for the major industries and markets that drive economies worldwide. The company delivers next-generation information, analytics and solutions to customers in business, finance and government, improving their operational efficiency and providing deep insights that lead to well-informed, confident decisions. IHS Markit has more than 50,000 key business and government customers, including 85 percent of the Fortune Global 500 and the world's leading financial institutions. Headquartered in London, IHS Markit is committed to sustainable, profitable growth.

IHS Markit is a registered trademark of IHS Markit Ltd. All other company and product names may be trademarks of their respective owners © 2017 IHS Markit Ltd. All rights reserved.

 

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