Ready, steady, go: the recovery is coming

29 Jun 2009

Industrial laser companies must be ready to meet a potentially rapid increase in demand from the manufacturing industry when the world economy starts to recover. That was the headline message at the 9th International Laser Marketplace seminar held in conjunction with the LASER World of Photonics 2009 trade fair in Munich, Germany, this month.

Addressing marketing and R&D professionals, the seminar comprised a series of presentations organized in co-operation with Optech Consulting, a market research firm based in Taegerwilen, Switzerland. The seminar offered expert analysis and commentary on the impact of the recession on the international laser marketplace.

David Belforte, president of Belforte Associates, MA, presented sales figures from the last two quarters that paint a very bleak picture of the industrial laser market. According to Industrial Laser Solutions March 2009, PennWell Corporation, global laser sales have dropped by 20% compared with 2008. The data also reveal that CO₂ lasers have been hit hardest in terms of both production and revenues.

"We couldn't get more bad news," summarized Belforte. He attributed the decline to a slump in the overall manufacturing sector, with industrial laser systems now established as a integral component of many machine tools. "This is not a laser problem, it is a manufacturing problem," he said. "We [industrial laser systems] are the innocent victims."

Despite the current problems in the manufacturing sector, Belforte remains optimistic. He believes that the economic downturn may have already bottomed out and recovery could begin in the fourth quarter. If that happens, the community will "go into 2010 with a better mind-frame".

Should the economy turn, Belforte believes that the manufacturing industry will be quick to reinstate orders placed in 2008. As a result, he said, the laser industry needs to prepare to meet a ramped-up demand for laser systems if it is to see a positive turnaround in revenues at the end of 2010.

Of course, any upturn in the global economy will boost some sectors quicker than others. The global semiconductor industry, for example, "has been a disaster for the last 3 years", but microelectronics is looking better because of the medical, dental and surgical instruments business. Meanwhile, Belforte expects that laser marking will lead the recovery in solid-state and fibre laser sales, thanks in large part to new US government marking legislations.

Looking beyond the economic downturn, Arnold Mayer, president of Optech Consulting, agreed that the outlook for fibre lasers remains promising. "The average annual growth rate [of fibre lasers] was 40% between 2005 and 2008," he said. Mayer's figures reveal that the 2008 market for fibre lasers in materials processing was more than a third of the global laser market, with an estimated value in excess of $1bn. When the recovery begins, fibre lasers could also penetrate CO₂ systems sales into the sheet-metal cutting market.

While the future of the laser market hangs tentatively on the backdrop of the global economy, the emphasis was on planning for the future by focusing on technology growth and improvement. "Laser technology is moving really fast," concluded Mayer. "There will be a lot of competition, which is good for the manufacturer and the user."