ABB notes recovery in process automation markets
23 Jul 2010
Zurich, Switzerland – ABB’s process automation business has reported increased orders Q2/10 on stronger demand. Base orders grew by over 20% while large orders increased by around 30% from low levels of Q2/09. The strongest markets were minerals, pulp & paper, marine and turbocharging.
Oil, gas and petrochemicals orders remained at the same high level as Q2/09. Orders from the Middle East and Africa more than tripled due to major investments in minerals and oil & gas. Asia grew by almost 40% on higher orders from metals, minerals and marine customers. Orders in the Americas increased by over 10% on higher demand from the minerals and oil & gas sectors.
For the group as a whole, ABB said that sequential quarterly growth of base orders since the middle of 2009 “appears to confirm that ABB has seen the bottom of its short-cycle businesses. Industrial customers are spending more on automation and power equipment and solutions to increase the efficiency and productivity of their existing assets.”
Assuming continued economic recovery in most regions, the company now expects that its short-cycle business will continue to support both top and bottom line growth over the remainder of the year.
However, for ABB’s late-cycle businesses – which make up the majority of the portfolio and which are driven by customer capital expenditure – the outlook for the remainder of 2010 remains mixed.
“Upgrades and expansions of existing power infrastructure are needed in all regions, including renewables and smart grids,” concluded ABB. “This is reflected in a near-record level of tendering activity in the Power Systems business. At the same time, lower electricity consumption in some regions has slowed the pace of power project awards in the short term. Furthermore, increased competition in the power sector continues to weigh on demand.”
On the industrial side, overall the group saw higher demand in the second quarter from some later-cycle sectors, such as minerals, pulp and paper and marine. Most customer spending in these industries, it noted, remains focused on equipment upgrades, replacement and service rather than capital expenditures for new capacity.
