Overview

Despite the slowing economic situation in China, it still represents the best growth opportunity for the instrument industry. Latin America is also an attractive market, especially Mexico and, a bit less so, Brazil, which is experiencing a decline in exports. Other developing countries like India and Korea also offer good prospects. It is the major developed regions, especially Japan and Europe, that will lag the global market in 2013.

Global

The global economic growth rate will slow this year, according to the International Monetary Fund (IMF). In October 2012, the IMF predicted global growth of 3.6% in 2013. In November 2012, the Organization for Economic Co-operation and Development (OECD) estimated global growth to be 3.4%.

The December 2012 “Global Business Outlook” survey conducted by Duke University and CFO, which surveyed 1,003 CFOs at public and private firms in the US, Europe, Asia and Latin America, found that on a scale of 1–100, the optimism level of CFOs averaged a 51.

North America

The Duke/CFO survey reported that US respondents expect their capital spending to increase an average of 2.5% in the next 12 months. US Duke/CFO survey executives expect their R&D spending will fall an average of 0.8%. North American In Deloitte’s quarterly “CFO Signals” survey of 86 North American CFOs, conducted in November 2012, respondents indicated that their capital spending will rise an average of 4.2% in 2013. Deloitte survey respondents reported that their R&D spending will rise an average of 2.7%. The Deloitte report also noted dwindling economic optimism, citing “net optimism,” which is the percentage of CFOs indicating falling optimism subtracted from those indicating increased optimism, of -21, lower than the previous quarter’s score of -16.

Asia

Asia is forecast to grow 6.6% in 2013, according to the Asian Development Bank’s (ADB) “Outlook 2012 Update,” published in December 2012. CFOs at the 77 Asian firms surveyed by Duke/CFO, excluding China and Japan, expected their capital and R&D spending to increase an average of 4.4% and 2.1%, respectively, in 2013. In the same survey, CFOs at 58 Chinese firms predicted their capital spending will rise 3.6% on average and their R&D spending will increase an average of 6.4%. The 117 responding Japanese CFOs in the Duke/CFO survey forecast their capital and R&D spending to grow 7.4% and 3.9% on average, respectively.

Europe

The OECD predicts that the Eurozone’s economy will grow 0.9% in 2013 after declining 0.4% in 2012. The ADB is even less optimistic, forecasting 0.2% growth after a 0.4% decline in 2012. According to the Duke/CFO survey of 121 European CFOs, capital spending and R&D spending are expected to rise an average of 3.5% and 0.8% this year, respectively.

Latin America

The Latin American economy is forecast to grow 4.0% in 2013, according to the OECD. Duke/CFO survey respondents at 142 Latin American firms estimate that capital spending and R&D spending by their firms will increase an average of 12.2% and 5.6% in 2013, respectively. The OECD predicts Brazil’s economy to grow 4.1% this year. CFOs at 49 Brazilian firms expected their capital spending and R&D spending to grow an average of 7.2% and 6.5% in 2013, respectively.

 Organization for Economic Co-operation and Development Predictions of GDP Growth, Selected Countries

                 2012 Chg.    2013 Chg.

 OECD Countries    1.4%         1.4%

 US                2.2%         2.0%

 Euro Area        -0.4%        -0.1%

 Germany           0.9%         0.6%

 France            0.2%        30.0%

 UK               -0.1%         0.9%

 Korea             2.2%         3.0%

 India             4.5%         5.9%

 China             7.5%         8.5%

 Japan             1.6%         0.7%

 Brazil            1.5%         4.0%

 Asian Development Bank (ADB) Outlook  Predictions of GDP Growth, Selected  Countries

                      2012 Chg.     2013 Chg.

 Central Asia           5.3%          5.7%

 East Asia              6.4%          7.0%

 China                  7.7%          8.1%

 South Asia             5.3%          6.2%

 India                  5.4%          6.5%

 Southeast Asia         5.3%          5.5%

 Japan                  1.7%          1.6%

 Developing Asia        6.0%          6.6%

 (44 ADB member countries)

 

 Bar Graph: Regional Sales Growth Predictions for Analytical Instruments Industry in 2013

 Japan           2.3%

 Europe          2.6%

 U.S. & Canada   3.4%

 India           4.9%

 Rest of World   5.3%

 Asia Pacific    5.5%

 Latin America   6.0%

 China           7.4%

 Overall         3.6%