The instrument industry’s performance in 2013 was even more disappointing than in 2012, as a modest rebound was anticipated. Widespread economic malaise and disruptive budgeting decisions, especially in the US, generated considerable uncertainty about future business prospects. Such uncertainty negatively impacted lab capital expenditures. The very real economic effects of budget sequestration in the US (see page 3) plus possible negative ramifications of the Affordable Care Act impacted government and academic funding as well as stalled expenditures in the important pharmaceutical and biotechnology markets. The negative influence of the depreciating yen was equally significant, as it transformed modest economic growth in the yen into a dollar-calibrated decline of over 15%. Since Japan represents about 15% of the worldwide instrument market, this alone reduced global growth by one full percentage point.

IBO’s forecast for 2013 industry growth was 3.6%, a moderate increase from the estimated growth of 2.4% in 2012, but this proved unsustainable in light of the aforementioned developments (see IBO 1/15/13, 7/31/13). Given the difficult market environment and the results of industry suppliers published during the year, IBO now believes that the industry expanded at around 2.1% in 2013 to $45.8 billion in revenues for initial systems, aftermarket products and service.

In addition to the US economic difficulties, the economic climate in Europe continued to be dire and improved only to “no growth” by year end. China slowed a bit, but not nearly as much as feared. However, inflationary trends in India coupled with rupee deprecation severely reduced instrument demand in that important market. Likewise, economic policies and a reduced demand for commodities limited prospects in Brazil.

It is now clear that the global economy is improving, and important markets will rebound from the gloom of the last two years. The US represents a much improved economic climate as a two-year budget agreement has been reached, and budget cuts have been reduced or eliminated for the next few years. Europe is recovering, and pent up demand should reward industry suppliers. Emerging markets from China to Latin America and the Middle East should continue to represent the brightest industry prospects (see page 15). IBO, therefore, forecasts instrument industry growth of 5.2% for 2014 to approximately $48.1 billion.

The CRO, biotech, and food and agriculture end-user markets will lead the way, with growth averaging more than 6.5%. Mass spectrometry (see page 6) and surface science (see page 10) will be the fastest growing techniques, with growth of over 8% each.