China and India are showing significant growth, while demand for traditional analytical techniques underpins the market, as Ian Shuttler explains.
The state of the analytical business or market is something many chemists take for granted. An important underlying fact about the business, which is often overlooked, is that the need for measurements is not going away. While the ’how’ and the ’what’ may change over time, the need to maintain drinking water quality, monitor for environmental pollutants and ensure food standards and the quality of products we buy is an ever present constant.
The overall analytical market is relatively healthy. It is a very diverse business made up of a huge array of complex end markets, technologies, customers and geographies. The market is huge and it’s growing. With a value of around $30 billion it covers everything from filter paper to high end mass spectrometry instruments. It is important to realise that one of the strengths of the market is this very diversity. If a company has a reasonable spread of products, services and geographies, even though some areas may be flat or declining, others will be growing, often driven by new regulatory requirements or applications. Currently, Europe and North America show slow growth, but have improved over the last few years as the restrictions on capital spending present in many industries have eased.
However, the focus of many in the industry is now on areas like China and India, where economic growth has produced strong double digit growth in analytical products. The interest and changes this drives in analytical equipment producers is evident by the number of manufacturing, R&D and technical support centres that have been established in China in the last few years.
Also, in the last few years, the life sciences arena has shown major variability in growth rates. Some areas are growing at over 20 per cent, while others are shrinking at an equally fast rate.
On the other hand, within the traditional analytical techniques there is a constant residual demand. Technologies such as ICP-OES, gas chromatography and molecular spectroscopy, where the rate of technology innovation has slowed, have seen strong growth. Even for an ’old’ technology such as atomic absorption there is still strong demand and it remains an ideal solution for particular analytical problems. These traditional analytical technologies can be likened to public utilities; there is a huge customer base, they may not be exciting, but are very necessary - hence the continual demand and associated growth.
In addition, as developing countries strive for economic growth there is an acceptance that trying to maintain environmental standards is an important goal and this drives demand for analytical equipment.
Regulations are another major driver in the analytical market. For example, the European directives on waste electrical and electronic equipment (WEEE) and restriction of the use of certain hazardous substances in electrical and electronic equipment (RoHS) have boosted demand for inorganic, chromatography and digestion tools.
The evidence of the underlying health of the analytical business is shown by the continuous stream of new products and services that companies introduce. Companies, no matter how big or small, do not invest major sums of money in declining markets.
Recent discussions at PittCon, held in mid-March in Orlando, US, with colleagues in the industry endorsed these sentiments. Much of the aisle talk focused around the needs of specific geographical markets such as China and India, or technological developments to address customer workflow needs such as inorganic speciation or chromatography. However, all agreed with the general theme that there is no sign of any decline in the need for analytical measurements which drives ongoing customer demand within the market.
The views expressed in this comment are those of the author and may not necessarily reflect the opinions of PerkinElmer.
Ian Shuttler is inorganic business manager for PerkinElmer Life & Analytical Sciences, based in Shelton, Connecticut, US.