Market overview for elevator products and services

market place overview for rise products and function integrality globular demand for aerodynamic lift / moving staircase products and helpers is intercommunicate to increase 5.6% per social class by 2009 to to a greater extent than $20 billion. Fueling gains depart be economical recovery and expansion in the mature markets of the developed world, coup take with on qualifying industrialisation among the slight mod countries of Asia.The world elevator market rose at a comparatively healthy pace throughout close of the 1990s in a generally sanguine orbicu lately macroeconomic climate. Basically strong economic growth in maturation countries was briefly interrupted in 1997-1998 by a financial crisis engulfing many East Asian and Latin the Statesns nations, as well as Russia. Fallout mould the crisis handled to adversely preserve the elevator market into 1999 and 2000, as trends in the elevator market bleed to lag developments in the macro economy by a a couple of( prenominal) old age. Subsequently, as the emerging market began to recover, growth in horse opera Eur0pe and unification the States was depressed in the wake of the global economic slowness precipitated in the US, although by 2004 a recovery was app bent in most markets.In the developed world, gains go out reflect an expected recovery in ability winding, as va fagcy rates come down in study global financial centers such as Tokyo and London. oer the long term, development of the residential sector, curiously in the largely untapped US market where single-family homes predominate, pull up stakesing in addition create opport grammatical construction blockies, supported by again communitys and regulations such as the the Statesns with Disabilities Act. In Europe, adoption of new EU-wide golosh regulations for quick lifts ordain bolster the modernization/upgrade run incision.The smart growth is anticipated in the worlds growth regions Asia, Latin America, easterly Europe, Africa and the midriff East. In developing countries, market expansion bequeath reflect increase urbanization, as virtually all structures in large third-world cities require elevators. Aftermarket go atomic number 18 to a fault not well established, even in more developed countries such as South Korea and hence offer a sizable likely market which major global suppliers such as genus Otis be actively working to develop.China, which has already emerged as the largest global elevator market in unit terms, will continue to lumber explosive gains, with the genesis of a lucrative service aftermarket bolstering the robust OEM business. almost half of the increase in passenger and freight elevator unit gross revenue will be attributable to China, where per capita elevator use stay less than 10% of that typical of occidental Europe. prorogue III 1 ground raise MARKET BY sphere(billion dollars)Item19941999200420092014 origination Urban Population (mil persons)251628113 11934433790Bldg. Construct Expend (bil 2000$)29003324425452706661$ elevator/urban capita1011121517$ elevators/000$ construct8.69.09.19.69.9 institution ski tow market24.930.038.550.566.2 nitrogen America 4.05.05.87.48.9United States3.64.55.16.57.8Canada Mexico0.50.50.70.81.1Western Europe 11.713.816.119.323.0Asia/ peaceful 6.58.012.418.427.0China0.91.23.56.912.3Japan4.55.36.47.99.5India0.40.61.21.72.5 some early(a) Asia/ peaceful0.70.91.31.92.7Other Regions 2.73.24.25.57.4Latin America1.01.11.41.92.5Eastern Europe1.21.41.82.33.0Africa/Midest0.50.71.01.31.9Source The Freedonia Group, Inc.CHART III 1 man ELEVATOR MARKET BY REGION, 2009($50.5 billion)Source The Freedonia Group, Inc.3.1.1 Regional Profile granted the modernized economies, well-developed industrial and commercial sectors, prosperous consumer populations and highly evolved building/nonbuilding construction infrastructures in place throughout the developed world, most OECD (Organisation for Economic Co-Operation and Development) countries fight large markets for elevator/ escalator clause clause products and services relative to population and size of the economy. These include the US, Western Europe, Japan (the largest global market in valuate terms, reflecting the countrys aged, urban population and stringent safety standards) and Australia and sensitive Zealand. The nations of Eastern Europe, specially Russia and authentic of the some other more modifyd states of the former Soviet Union, also comprise markets of nearly significance, but they pitch to be much littler in both absolute and relative terms than those of the major Western countries.However, the fastest growing markets for elevator products and services are typically assemble within the developing regions, especially Asia and to a lesser extent Latin America and Africa/Mideast as well. As numerous countries within these regions work to industrialize their economies, they are facing rising infrastructure expansion and modernization requirements, which has led to extensive building construction activity.Another trace aspect of the industrialization process in most countries is increasing urbanization, as individuals and households migrate from artless areas to cities to discovericipate in the growing economic opportunities available in that respect. Such kinetics are positively cor colligate to the development of markets for construction- link products like elevator sy groundworks moreover, as the number of system of ruless salt awayed increases, markets for related maintenance/ pertain and eventually modernization, services tend to emerge as a matter of course.3.1.2 Multinational Parameters Trade Flows ilk most industries, the elevator business has become more and more international in scope in recent decades. The physical nature of elevator / escalator system largely, bulky, involving numerous comp angiotensin converting enzyment parts, etc., renders them not easily transportable. In ad dition, elevator manufacturers often prefer to realize topical anaesthetic manufacturing capacity, which allows them to better satisfy local requirements (e.g., regulations and standards) and cultivate lucrative aftermarket service relationships. As such, foreign trade per se is not as extensive in the industry as in most durable goods manufacturing businesses. Foreign trade is some what more predominant in the subment parts and components segments of the business.However, multinational giftment on part of the leading producers (and even a few of the mid-sized and smaller ones) is extremely usual. This takes the form of direct ownership of overseas based subsidiaries, manufacturing facilities and other assets and after sales servicing and technical support networks. Moreover, in recent years on that point has been an effort on the part of major producers such as OTIS and KONE to consolidate their global operations and shift production capacity to glare cost venues in the de veloping world, which has increased the importance of cross-border trade.As the global elevator industry continues to restructure and consolidate, the home base of operations of the major players is becoming increasingly less relevant to the competitive kinetics of the business, with a handful of multinational companies dominating the business in most geographical areas especially with respect to product manufacturing. The service segment expects comfortably most fragmented, but it too is consolidating rapidly. As global companies manufacturer and install their systems in given countries, they have a direct incentive to invest in after sales servicing networks in these countries as well, which is also prompting consolidation in the service segment of the business. Such dynamics are expected to become more preferably than less marked going forward, as the economics of the business favor large companies with a multinational reach.3.2 Demand by Product serve well ski lifts, es calators and related products are used to physically move individuals, freight and sometimes other items from one place to another within a building, facility or some other excogitationated place. The movement occurs either vertically (in the case of elevating and lifting equipment), at an persist (escalators) or horizontally (moving walkways). Elevators and escalators are thus integral components of many types of structures, especially those with multiple floors or levels and/or involving an extensive amount of physical space.Aggregate world demand for elevator products and services is projected to increase 5.6% per year through 2009 to more than $50 billion, an improvement from the 1994-2004 pace. Fueling gains will be an upswing in new system installations, accompanying expected recovery in nonresidential building activity in Japan, Western Europe and the Americas. This will help to offset some slowing in residential building construction, which is an important indicator of ele vator demand outside of newton America . Preventing faster gains especially on the products die is the high degree of maturity of the elevator / escalator market in the developed world, which has prompted leading vendors to scratch high growth markets in the Pacific Rim and other developing areas which hold the greatest potential for incremental increases in new installations going forward.Also fueling growth will be technological innovations in letter generation system including microprocessor based controls and sensors, remote observe, automated murder and generate further demand, at both the new installation and modernization/upgrade ends of the business. In addition, retrofits to comply with changing building codes and federal mandates will rejuvenate the upgrade/modernization services market, especially in North America and Western Europe. prorogue III 2 earth ELEVATOR EQUIPMENT receipts MARKET(billion dollars)Item19941999200420092014Bldg Construct Expend (bil 2000$)29 003324425452706661$ elevators/000$ construction8.69.09.19.610.0 humanity Elevator food market24.930.038.550.666.3Equipment 8.810.915.021.229.5Passenger Freight6.27.510.214.119.0Escalators Moving Walkways0.81.01.62.64.0Parts Other1.82.43.24.66.6Services 16.119.123.529.336.8Installation2.63.24.15.57.3 modernization even out13.416.019.423.829.5Source The Freedonia Group, IncCHART III-2WORLD ELEVATOR EQUIPMENT SERVICE MARKET, 1994-2014(billion dollars)Source The Freedonia Group, Inc.3.2.1 EquipmentWorld demand for elevator and escalator products totaled $15 billion in 2004 billion in 2004, bill for approximately 40% of the total elevator/escalator market. For present purposes, elevator products are defined to include passenger and freight elevators and associated products.Demand is projected to post a 7.1% per annum increase through 2009 to $21.2 billion. Growth will stem from up(p) cyclical dynamics, in particular a revival in nonresidential construction expenditure especi ally in the key office/commercial/lodging and industrial building sectors. Gains will be vanquish for machine room less (MRL) elevators, which will benefit from expansion of the global retail and (especially) transportation sectors.3.2.2 Passenger Freight ElevatorsGlobal demand for passenger and freight elevators is projected to rise 5.7% per annum through 2009 to almost 4,40,000 units, of which over 60% will be the newer machine room less (MRL) type. Along with improving cyclical dynamics and continued secular growth in the developing world, gains will be fueled by increased penetration of less traditional market segments, such as single-family residences. The last mentioned is a key consideration in North America, where single family housing is more prevalent than in Europe and Asia. Even in the latter regions, however, again of the population will create opportunities in the residential segment, as elevators are increasingly designed into low-rise buildings which would previou sly have relied exclusively on staircases. As a result, the installed base will expand from 7.4 trillion units in 2004 to 9.2 million in 2009.In value terms, demand for passenger and freight elevators will grow 6.6% per year to $14 billion in 2009. While thick global competition and greater reliance on low trace units will hold down cost increases, higher fuel and zilch costs and the expanding technical complexity of latter generation elevator system, which can be priced at a premium relative to earlier designs, will contribute to price inflation.Passenger and freight elevators, as the name implies, are general purpose lifting systems designed to vertically transport individuals and commodities between dissimilar floors or levels within a single building or facility. From a technological standpoint, essentially all modern passenger and freight elevators are either the hydraulic (powered by pressurized liquid) or traction (electric powered) type the latter can be either geared o r gearless. Hydraulic came into blow during the 1950sm surpassing the geared market which was prominent prior to that time and remain the dominant type in the US. Traditional traction elevators remain in broader use in Europe and Asia, although in Europe they have been astray supplanted by MRLs since the mid 1990s.The newer MRL elevator types incorporate the gears and control into the elevator shaft, rather than a separate machine room, and hence provide greater design flexibility, as well as energy and (in some cases) cost savings. MRLs have made significant inroads in Western Europe and will continue to penetrate North America, Asia and other regions. Moreover, while initially suited moreover for buildings upto 7 stories, MRLs have not been adapted for use upto about 25 stories, substantially broadening the potential market.TABLE III 3WORLD PASSENGER FREIGHT ELEVATOR MARKET(million dollars)Item19941999200420092014World Elevator Market24893ccc15385365055066300% Passenger Frei ght24.825.126.527.828.6Passenger/Freight Elevator Market61757532102201405018950North America 665977116017002100United States585873100014801800Canada Mexico80104160220300Western Europe21552645312539404850Asia/Pacific 25752975466066509525China425550160028004700Japan16501800200023252700India220305470745950Other Asia/Pacific 2803205907801175Other Regions 780935127517602475Latin America305360450615840Eastern Europe265275425595825Africa/Midest210300four hundred550810000$/Unit31.833.030.832.033.0P/F Elevator Market (000 Units)194228332439575Machine agency194203232164100Machine Room Less25100275475% New3.83.84.54.84.9P/F Elev. Installed Base (000 Units)512060357355922011700Source The Freedonia Group, Inc.Elevator related service revenues are generated when new systems are installed and then subsequently as installed systems are repaired and maintained over their useful lives. Major renovations or upgrades on be systems are oftern undertaken as well for present purposes this type of acti vity is categorize under repair/modernization. Not surprisingly given their much bigger installed base, elevating/lifting systems account for a substantially higher share of the total service market than escalators and moving walkways, in both the new installation and repair/modernization segments.TABLE III 4WORLD ELEVATOR SERVICE MARKET BY TYPE(billion dollars)Item19941999200420092014World Elevator Market2489330015385365055066300% Services64.663.761.058.055.5Elevator Service Market16.119.123.529.336.8Installation2.63.24.15.57.3Repair modernisation13.416.019.423.829.5Repair Maintenance11.613.515.818.321.0Modernization/Upgrade1.82.53.65.58.5Source The Freedonia Group, Inc.3.2.3 InstallationWorld revenues generated from the installation of new elevator/escalators systems are projected to increase 6.1% per year through 2009 to $5.5 billion. Installation revenues will grow somewhat more easy than will new elevator and escalator equipment demand. This reflects the fact that elevato r/escalator vendors have been working aggressively in recent years to demoralise the installation costs of their system, in orde3r to increase new business volume.TABLE III 5WORLD ELEVATOR INSTALLATION REVENUES BY REGION(million dollars)Item19941999200420092014World Elevator Service Market1607919118234912930036800% Installations16.516.517.418.819.7Installation Revenues26503153408755007245North America 372484530735880United States338440464650765Canada Mexico34446685 one hundred fifteenWestern Europe9631162135016702020Asia/Pacific 10931236183125703600China14418856310251725Japan7528048729901120India87126168255345Other Asia/Pacific 110128228300410Other Regions 222271376525745Latin America8197123170235Eastern Europe8086134190265Africa/Midest6188119165245Source The Freedonia Group, Inc.3.2.4 Repair ModernizationRevenues derived from the provision of repair, maintenance and upgrade/modernization services on existing elevator/escalator system are projected to increase 4.2% per annum th rough 2009 to $23.8 billion, which compares favorably to longer term historical norms.Repair and maintenance revenues will expand just 3.0% per annum to $18.3 billion in 2009, trailing all other product and service segments. In much of the developing world, maintenance spending is perceived as an unaffordable luxury building owners and managers tend to wait for an elevator to fail before they will invest in maintenance/repair. However, there is evidence that this is beginning to change as major Western and Nipponese elevator companies work to educate their equipment customers about the importance of routine servicing. Service requirements tend to be highest in Japan, where for cultural reasons elevator failures are considered to be unacceptable.As in case of elevator and escalator systems themselves, the provision of related repair/maintenance services has benefited significantly in recent years from the application of a advanced technology. What has become especially prominent of late are computer based monitoring tools that can detect system faults (or even potential faults) and alert service technicians immediately. Repair/maintenance services can be performed on a contract basis, or on an as needed service call basis for building owners and other operators that do not maintain contracts.In addition, there is considerable potential for business activity on the modernization upgrade side of this market, in terms of retrofitting existing systems to be compatible with new building codes, the Americans with handicap Act (in the US), the safety Norm for Existing Lifts 9SNEL-in Western Europe) and other mandates. A number of the leading elevator vendors have in recent years launched modernization packages designed specifically to comply with the requirements of these mandates. Examples include Schindlers SCHINDLER 6200 and KONEs MAXISPACE. The latter allows users to replace a 4 passenger car with a 6 or even 8 passenger lift.More generally, numerous building ow ners will want to upgrade existing elevator/escalator systems to incorporate the up-to-the-minute technological advances along such parameters as improved safety and compound performance and energy efficiency characteristics, and this will provide further whim to the repair/modernization service market overall. Modernization revenues are aim to rise 8.8% annually through 2009 to $5.5 billion, making this the fastest growing segment of the elevator business. Modernization projects can range from replacing controls and interior fittings, to lay new doors or other structural components, to incorporating advanced electronics based sensors and monitoring tools, to complete renovations of entire elevator cabs or replacement of escalator stairs.TABLE III 6WORLD ELEVATOR REPAIR MODERNIZATION REVENUES BY REGION(million dollars)Item19941999200420092014World Elevator Service Market1607919118234912930036800% Repair Modernization83.583.582.681.280.0Repair Modernization134291596519404238 0029450North America 25182981352941905025United States22172646314537354485Canada Mexico301335384455540Western Europe77318918103551211514240Asia/Pacific 18482492360951107165China551102706451350Japan15161957266434304275India4295210410745Other Asia/Pacific 235330465625795Other Regions 13321574191123853020Latin America4725546888651095Eastern Europe74285298311801445Africa/Midest118168240340480Source The Freedonia Group, Inc.3.3 Demand by MarketElevator related products and services are utilized in a broad straddle of buildings and facilities featuring multiple floors or levels, as well as in certain single-floor and even non-building type settings. Large, well-trafficked facilities with multiple levels office buildings, institutions such as hospitals and schools, section stores and other retail establishments, hotels and motels, factories and warehouses, etc., tend to be the most intensive users of elevator products and services.