The industrial automation business
seems to lag - still showing some growth (in the past quarter). But this week, ARC
Advisory Group, the premier automation analyst published "A Series of Unfortunate
Reports" by Larry O'Brien.
"Clearly, the global manufacturing
environment is in the midst of a big contraction. Projects are still proceeding
in many sectors, but many are being canceled and/or postponed. We at ARC still feel
that despite overall market contraction in North America, Western Europe, and other
developed economies, there will still be growth in the Middle East and emerging
markets, such as China and India, although this growth is probably less then half
the levels we saw between 2007 and 2008. Nobody gets a free pass this year, and
even the market leaders are going to find it a challenging business environment."
The automation leaders are all undergoing
shrinking pains, some worse than others. Large companies are all driven top-down,
by organizational management and budgets based on ratios. There's very little real
innovation, and minimal agility. When revenues shrink, the bean-counter ratios demand
shrinkage to protect the bottom line. If that's not preserved, the companies' stock
declines and the dominoes begin to fall.
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