The latest research from Frost and Sullivan shows the European Metallic Welding Equipment Market has started to recover from the downward spiral it had found itself in over the last few years. Previous years have seen slow demand and price falls, resulting in declining revenues.
Frost & Sullivan found greater price stability and demand for more advanced equipment has helped revenues to rise to $1.73 billion. Revenues are forecast to grow at a modest rate over the next few years, reaching $1.95 billion in 2007.
Research Analyst Ozan Dogruer says the laser welding segment is the fastest growing area of the market due to its superior performance. Revenues totalled $101.3 million in 2000, and Frost & Sullivan forecasts strong growth over the next few years will cause the market to nearly double in size to $192.5 million in 2007.
‘The main attractions of laser welding are the quality of the weld, which requires little or no after work, as well as the speed and the flexibility of the technique,’ says Mr Dogruer.
‘Nd Yag lasers are also ideal for use with welding robots, as the laser can be carried through fibre optics, making it perfectly suited for multi-dimensional welding applications.’
‘Although this equipment incurs high capital costs, many end-users are coming to realise that the savings in productivity will eventually produce a return on the investment.’
The study found technological advances had helped growth in the laser welding and will continue to do so.
‘Laser welding has been around for many years but the technology has only recently begun to see some significant developments,’ Mr Dogruer continues.
‘For instance, light sources have changed from lamps to diodes which has increased the efficiency of equipment by up to 10 percent. Power outputs have also been increasing, allowing thicker sections of metal to be welded, this represents an important area of growth. The continuing development of the technology and improvements in performance are expected to result in increased demand over the coming years.’
Demand for laser welding equipment is strongest in the automotive industry, which accounted for 20 percent of revenues last year. The potential gains in productivity also stimulated growth in demand from the metal fabricationsector. The aerospace sector also showed an increase following the increased use of welding applications in this area.
Other industrial applications recorded a slight decline but this is mainly due to higher rates of growth in other applications, together with the other segments such as chemical, shipbuilding and construction, these applications represented a fifth of market revenues.
The study found the European metallic welding equipment market faces many challenges over the next few years. One of the main concerns is the migration of many manufacturing projects to Eastern Europe.
‘The state of the global economy also has a strong bearing on manufacturing output and the subsequent demand for welding equipment,’ Mr Dogruer says.
‘The current slowdown in the American and Asian economics could have serious ramifications for manufacturers in Europe. Recent events in America have escalated fears and have led to sharp declines in the stockmarket. This is expected to have far reaching consequences for the rest of the global economy and a medium term decline in global trade seems inevitable.’
Substitutes to welding also pose a threat to market growth: mechanical and adhesive joining technologies have been developing and in some applications offer more secure joints at a lower costs.
‘Designers are constantly looking for new methods for joining materials, as welding can sometimes be costly and ineffective for certain applications,’ explains Mr Dogruer.
‘For instance, the use of aluminium has been growing significantly over recent years, partly fuelled by the automotive industry. However, this material has presented various difficulties for the welding industry. Surface contamination has been found to affect the quality of arc welds and the reflective properties of the metal has made laser welding problematic.
One alternative, glue, has proved to be quite effective at joining aluminium and requires no surface treatment. Although its uses are limited at present, this technology may continue to develop and find increasing uses in industry. Riveting and clinching are also widely used for joiningapplications and present strong competition for welding.’
The trend towards automation has strengthened over the years, the study says. This has mainly been attributed as a response to high labour costs and the lack of skilled personnel.
‘Although this is helping to stimulate revenue growth in the short term, the long-term consequences of de-skilling the work force are unclear,’ Mr Dogruer says.
‘This trend could lead to the loss of vital skills and knowledge, which are essential to the development of the welding market. In order to maintain a healthier welding industry, further support is needed to promote thewelding profession, through training and recognition.’
However, the growing use of new materials such as aluminium and lighter steel alloys are expected to open up new applications for metallic welding.
The primary focus for the future will be to further reduce the cost of the welding process and improve the strength and quality of welds. Over the last few years, progress in this area has been slow. Concerns over the future of the market have grown and this has attracted much attention towards improving current processes and searching for new technologies.