Spectroscopy Hits Its Stride

In a recent article, Lawrence S. Schmid, of Strategic Directions International, Inc., analyzed the current state of the spectroscopy market. Here are a few highlights.

For many years, the overall instrument industry, and spectroscopy in particular, has proven to be quite resilient while serving the scientific requirements of a vast array of applications in every conceivable sector. Growth has been fairly steady for the last decade, averaging around 6% annually until recently. Compared to the double-digit growth seen during the 1980s and 1990s, most would agree that this instrument market is both mature and stable.

Based on the trends that have been seen during the last half-year, it is safe to say 2011 will be a good year. The demands of the life science marketplace, environmental issues, the search for new materials, and security and defense concerns are important driving forces. Additionally, economic trends are encouraging. In October 2010, the International Monetary Fund (IMF) issued its World Economic Outlook forecast, which indicated that world output would increase 4.2% in 2011 from 2010. Advanced economies are expected to increase about 2.2%, but emerging and developing economies will likely expand 6.4%. Since then, the IMF, the Organization for Economic Cooperation and Deveopment (OECD), and other forecasting groups have become steadily more upbeat.

With these developments in mind, and after reviewing various industry data for 2010 and the prospects for 2011, Instrument Business Outlook (IBO), a publication of Strategic Directions International, Inc. (SDi, Los Angeles, California), a consulting and market intelligence firm specializing in this market, has estimated the total revenues for the worldwide market for analytical and life science instrumentation at almost $40 billion for 2010, an almost 7% increase from a depressed 2009. SDi now forecasts that the analytical and life science instrument industry will continue its upward expansion in 2011 at the rate of 5.6%. It is likely that industry revenue growth will be in the 5–7% range for the foreseeable future.

The overall spectroscopy market is estimated to have increased 7.4% in 2010, a substantial improvement over 2009, and a return to the norms of 2007 and 2008. SDi projects spectroscopy market growth in 2011 will be slightly less exuberant but still robust at a rate of 6.7%.

In 2010, the global molecular spectroscopy market increased dramatically by almost 10% to over $3.4 billion, quite a turnaround from the decline in 2009. The pace of growth in demand for molecular spectroscopy will be far more moderate in 2011 following the healthy rebound that it experienced in 2010. As government stimulus spending, which had been a huge boon to academic and government demand for nuclear magnetic resonance (NMR), dwindles in 2011, the growth rate for NMR will be cut in half for the coming year, and will be one of the biggest reasons for the overall drop in the growth rate for molecular spectroscopy.

The total market for atomic spectroscopy is forecast to grow at 6.5% for 2011, reaching $3.25 billion. Although such growth is, historically speaking, quite high for this market, it will fall a bit short of last year's realized growth of 6.9%. Strongly buoyed by the improving global economy, last year's total outperformed our original expectation that the atomic spectroscopy market would grow 5.3% for 2010. Ongoing improvement in the end markets will continue to provide this positive effect on the atomic spectroscopy market in the coming year.

In the aftermath of a difficult 2009 for MS, something the various suppliers were unaccustomed to, 2010 proved to be the turnaround for which the industry hoped. MS revenues expanded almost 10% in 2010, more than making up for the 3% decline in 2009. Governmental stimulus funding and a pent-up demand for new MS products were especially instrumental in this turnaround. Improved overall economic conditions should maintain this upward momentum. Demand for MS, which demonstrated robustness during the recession, is expected to maintain consistent high single-digit growth in 2011. In fact, MS is expected to be the fastest growing segment of the entire analytical and life science instrument market with a projected growth rate of 8.5% for 2011.

Click here to read the full article by Lawrence S. Schmid, The Spectroscopy Market Hits Its Stride.