Calendar year second quarter organic growth continued at a strong pace for major US publicly held instrument and laboratory product companies. However, currency headwinds, as well as weakness in industrial markets and Japan expunged organic growth. Currency reduced gains by about 7%, resulting in roughly flat second quarter average sales growth.

Pharmaceutical and biotechnology markets were particularly strong for these businesses, especially Agilent Technologies, Thermo Fisher Scientific and Waters. All three companies recorded roughly 15% organic sales growth from pharmaceutical and biotech customers due to new products, increased market share, and strong demand in the US and China.

Other companies also reported significant growth in this market. PerkinElmer recorded double-digit sales growth from its largest pharmaceutical and biotech customers. US pharmaceutical sales were strong for Danaher’s Life Sciences business and QIAGEN. International firms, such as Shimadzu Analytical and Measuring Instruments (AMI), and Merck KGaA Life Science (Merck LS) also benefited from strong US pharmaceutical demand.

Applied markets were healthy, as Agilent, Thermo and PerkinElmer recorded strong demand for food and environmental applications, especially in China. Agilent’s food sales grew 7% organically. QIAGEN’s Applied business grew roughly 10% organically with strength in both the US and China. Merck LS noted higher food and beverage demand in Latin America.

Academic and government sales grew for most companies. For Waters, they grew roughly 9% organically, including double-digit growth in China. QIAGEN Academia sales grew roughly 6% organically, as increased funding in the US and Asia Pacific more than offset weakness in Europe. Academic and government sales for Agilent grew 5% excluding NMR, and academic spending improved for PerkinElmer outside of Japan. Thermo was one of the few companies to benefit from the budget release in Japan; however, the firm’s total academic and government sales grew in the low single digits. Spectris Materials Analysis recorded lower academic research spending in several geographic markets.

Similar to the previous quarter, industrial markets were challenged. Lower industrial demand took a toll on Bruker Nano Surfaces, and demand was soft for Thermo Analytical Technologies and Waters’s TA Division. Agilent reported flat chemical and energy sales. In contrast, Shimadzu AMI reported a strong domestic recovery for chemical and metal industries, as well as higher industrial demand in China.

China was a highlight for a number of companies including Waters, which posted 25% organic growth in the country. Most companies benefited from a weak year-over-year comparison. PerkinElmer and Merck LS each recorded double-digit growth in China. Chinese sales grew in the mid-teens for Thermo and the low double digits for Agilent. Chinese organic sales were also strong for Bio-Rad Laboratories Life Science (Bio-Rad LS) and grew 6%–7% for Bruker Scientific Instruments (BSI).

Sales in other Asia Pacific regions except Japan were robust due to pharmaceutical and applied demand. PerkinElmer reported double-digit growth in India and South Korea each. Merck LS detailed strength in Singapore and South Korea. But both firms experienced weakness in Japan, as did Agilent, Bio-Rad LS and BSI. Japan improved from the previous quarter for Thermo, Agilent and Waters.

US sales were particularly strong for Illumina, growing 32%. Agilent and Waters recorded roughly 7% growth in the US, while sales expanded in the mid-single digits for both PerkinElmer and Thermo. Bio-Rad LS recorded roughly high single-digit growth in both the US and Western Europe. For Agilent and Illumina, European sales grew in the double digits organically.

NGS sales were robust for Illumina, led by demand from clinical markets. PerkinElmer reported a strong uptake for the Labchip Touch for NGS sample preparation, and Agilent experienced continued demand for target-enrichment solutions. QIAGEN’s NGS business expanded due to increased demand for bioinformatics. Chromatography sales were strong for Agilent and Waters, as well as for Thermo. Agilent and PerkinElmer each noted demand for atomic spectroscopy. Finally, service revenues contributed notable growth for Illumina, PerkinElmer and Waters.

Life Science Index Sales

Second quarter Life Science Index sales advanced 7.8%, 9.0% excluding currency, to $3,551 million. Excluding Illumina, Index sales grew 6.5% organically, led by demand from pharmaceutical and biotechnology markets. Index growth also benefited from clinical demand at several companies, including Affymetrix and Illumina. Growth was further boosted by bioprocess production sales at Thermo LSS and Merck LS. Adjusted operating profit margin for the Index climbed 180 basis points to 24.1% of sales. Excluding Illumina, operating profit margin expanded 100 basis points to 22.7% of sales.

Analytical Instrument Index Sales

Second quarter sales for the Analytical Instrument Index, which is comprised primarily of global broad-based instrument businesses, improved 0.6%, 5.4% excluding currency, to $3,461 million. Pharmaceutical demand helped drive sales growth, as did demand for LC and LC/MS at Agilent, Thermo Analytical Technologies and Waters. Index sales also benefited from double-digit health sciences–revenue growth for Waters. Conversely, weak NMR demand offset revenue growth for Agilent and BSI. In addition, weak demand in industrial markets curtailed sales growth. Adjusted operating margin expanded 90 basis points to 16.8% of sales.