The IBO 2006 Review and 2007 Forecast

In general, 2006 was a good year for the analytical and life science instrument industry. The world economy grew 3.8%, according to the United Nations (UN), and 5.1%, according to a September 2006 estimate by the International Monetary Fund (IMF). Steady US growth, rebounding economies in Japan and the European Union, and ongoing development in Asia fueled economic expansion. For instrument companies, growth in emerging markets, new environmental and food regulations, product introductions, consumables and service drove demand. However, spending by the pharmaceutical industry, academia and the government was uneven.

Instrument industry growth accelerated in 2006 to 6.5%, up from 6.1% in 2005. This estimate is based on the instrument forecast for the markets included in this IBO forecast issue. Please note that three new product segments (laboratory centrifuges, in vivo animal imaging and and manual pipettes) have been added to the market forecast and thus, this year’s forecast is not comparable to last year’s (see IBO 1/15/06, 7/31/06). All fiscal year numbers have been adjusted to reflect these additions.

The world economic situation is expected to remain much the same in 2007 as in 2006. After a number of stumbles, the European Union is expected to begin a resurgence in 2007, due in part to a decline in inflation and a lowering of the unemployment rate. Asia will continue to expand, fueled by China and India’s economies, foreign direct investment and exports, although at a slower rate. The UN estimates the global economy to grow 3.2% this year, while the IMF forecasts growth of 4.9%. Both organizations cite the slowing of the US housing market as a reason for slower growth.

However, such a trend will not directly affect instrument sales. Rather, the industries that drove demand in 2006, including metals and biotechnology, are expected to continue to experience good growth. IBO estimates that the analytical and life science instrument market will grow 6.1% in 2007, the same as last year, to $34.6 billion. Continued momentum in key regional markets, such as China, India and Europe, will once again contribute to instrument demand.

The fastest-growing market segment in 2007 is expected to be mass spectrometry (see page 6). New products and a growing number of applications in life science research, as well as environmental and food testing, continue to propel the market. However, the fastest-growing product segment belongs to the life science market (see page 5). In vivo animal imaging is forecasted to be the fastest-growing product segment of the instrument market in 2007. New products, increasing demand from academic reseasrch and drug development applications, as well as the novelty of the technique, contribute to its growth. The life science market is also the largest market.

Fourier transform-mass spectrometry and dissolution testing, a laboratory automation technique (see page 7), are forecasted to be the second and third fastest-growing product segments in 2007. Both techniques are utilized for drug development.

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