Our annual outlook on how the core spectroscopy techniques (molecular, atomic, and mass spectrometry) will fare in 2013 based
on the results from last year's data.
In retrospect, 2012 was a major disappointment for the spectroscopy instrument market. In 2011, economic problems did little
to halt laboratory purchasing plans, and we hoped that 2012 would show the same solid growth we had seen in 2010 and 2011.
Unfortunately, it did not happen that way. During 2012, economic difficulties, especially in Europe, but also in the United
States and Japan, had a major impact on prospects for the spectroscopy instrumentation industry. China, India, and Brazil
— once the industry's saving grace — experienced a slowdown and thus contributed to lackluster sales. Some of the gloom was
the result of political wrangling in the United States and uncertainty regarding negotiations over tax hikes and budget cuts,
including the so-called fiscal cliff, caused corporate management to put expansion plans on hold. Likewise, austerity measures in Europe, a threatened euro, and
recessions cascading from one country to another took their toll.
Spectroscopy is a key sector of the analytical and life-science instrument industry. For many years, the overall instrument
industry and the spectroscopy segment in particular have proved to be quite resilient while providing scientists the tools
they need for a vast array of applications in every conceivable industry. Although we are no longer seeing the double-digit
growth of the 1990s, growth has been fairly steady for the last decade, averaging around 6% annually. Yet changing global
economic conditions and governmental actions have had their effect.
As 2012 unfolded, the economic news became darker and darker. The actual economic downturn deepened when corporations and
governments failed to make investments and added to the general economic uncertainty of the times. In January 2013, the International
Monetary Fund (IMF) cut its forecast of world growth based in part on a continuing sovereign debt crisis in Europe. Although
world economic growth was 3.2% in 2012, it was predicted the global economy would only increase by 3.5% for 2013, weighed
down by continuing problems in Europe. The IMF also expects the euro zone to contract 0.2% in 2013, instead of expanding by
0.2%. Developing economies, on the other hand, have slowed slightly, but will still outpace advanced economies. News releases
of China's recent economic results were encouraging; many observers had worried that economy was headed for trouble, which
would have had a negative impact on the instrument industry so dependent on that growing market.
After assessing these events and trends and reviewing various industry data for 2012 and the prospects for 2013, Strategic
Directions International, Inc. (SDi), a consulting and market intelligence firm specializing in this market, has estimated
the total worldwide market for analytical and life-science instrumentation revenues at $43.7 billion for 2012, an increase
of only 2.4% from 2011. SDi now forecasts that the analytical and life-science instrument industry will perk up somewhat in
2013 at a rate of 3.6%. Revenue growth for the industry is expected to do much better in 2014 and exceed 5% that year.
Aftermarket purchases of products and services, including such items as consumables (especially chemicals), software updates,
and accessories, has become an important aspect of the analytical and life-science instruments market. As the installed base
of instruments grows and the market matures, the aftermarket becomes especially important. In fact, in selected technology
areas the aftermarket is a very significant product segment that is growing faster than instrument system revenues and is
often more profitable. It is also true that for some technologies, instrument systems (hardware) may actually be declining
in unit sales while the aftermarket provides at least minimal growth. So it should be noted that all the revenue projections
in this article include the total mix of revenue sources: instrument system sales, aftermarket offerings, and service.