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Building Automation’s Journey
Senior Market Analyst
The building automation market is currently on a journey towards an ideal where the majority of buildings has an automated control system achieving energy savings. Whilst some journeys can be fast, efficient and stress free; others are not as simple. On this building automation journey, different parts of the world are having very different experiences.
The European building automation market is currently driving along the
road quite slowly. Over the past few years there has been some large
pot holes to avoid, causing the market in some countries to contract,
such as Spain and Portugal. Unfortunately, the situation is likely to
get worse before it gets better. A potential exit from the Euro for
either Greece or Cyprus is looking more unlikely, but the lack in
confidence across the region is straining construction spending.
German building automation market was historically traveling on the
autobahn, but today the German market has stalled. In 2012, the German
building automation market was essentially flat on 2011 and is unlikely
to get going again until confidence returns within the wider region.
Middle East market is on a helicopter on-route. The building
automation market is keeping up with the Asian market in its plane and
certainly growing faster than parts of Europe and North America. Across
Africa and the Middle East, the ‘Arab Spring’ unrest has led to some
hesitancy on the part of investors, thus moderating construction
growth. On the other hand, some wealthier countries, particularly those
such as Saudi Arabia and Jordan, have boosted construction in a move to
quell potential dissidents in their countries.
American building automation market is on the train but over the
past few years has not being going at full speed. The US Congress
avoided going over the fiscal cliff in March 2012, but the deadline for
a deficit reduction package was not met, thereby triggering automatic
spending cuts but since then the train has not derailed. There is
currently an excess capacity of non-residential structures in the US
which will need to be worked off before there is a significant need for
new structures to be constructed. However, this provides an opportunity
for the building automation retrofit market, particularly in retail
The Asian building automation market is on a plane. It left the airport a little later than the European’s car or the American train, but it is now traveling faster than the other two. The building automation market in Asia, excluding Japan is forecast to see the highest growth in comparison to the other major regions in the world over the next five years. However, emphasis on energy savings and efficiency is not such a priority as in other regions, which is slowing potential growth. The Asia region accounted for approximately 44% of global construction spending in 2013 and will lead global construction growth in 2013, albeit at a slower rate than in previous years.
Japanese building automation market has had to land in order to
weather the economic storm. The Japanese market should be growing
stronger because of a renewed interest in energy savings. However, the
investment capital to pay for building automation installations in
existing buildings is lacking because consumer confidence and economic
confidence is low. The new stimulus programs created by Prime Minister
Shinzo Abe have created a more optimistic outlook for construction,
which may start to filter down into the building automation market in
the medium term.
the world building automation market is on its way but is not traveling as fast as it could be. While 2012 construction
spending finally saw an increase over the high of 2007, (in real terms)
it is clear that construction spending remains weighed down by the
weakness in the global economy. However, as construction spending picks
up, the road blocks slowing the building automation market growth will
start to be removed and the general outlook for 2013 and beyond will
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