Now that 2010 has come to an end on a high note, it is time to look ahead to the coming year and the prospects for the analytical and life science instrument industry. Based on the trends that have been seen during the last half year, it is safe to say 2011 will be a good year for the industry.

Last year’s forecast came on the heels of a particularly bad year for the industry, and we were perhaps a little reluctant to be very bullish about 2010. Our forecast of overall growth of 5.2% (see IBO 1/15/10), while a huge improvement over a decline in 2009, fell short. IBO now feels the industry expanded 6.9% in 2010 to a total of $39.8 billion in revenues for initial systems, aftermarket and service expenditures worldwide. Total revenues for 2009 were $37.2 billion. Both figures include about $800 million more than previous forecasts, as additional laboratory equipment has now been included. In fact, there is a new technology section dedicated to laboratory equipment in this forecast (see page 13).

In 2010, laboratories resumed their interest in purchasing new instrument systems due in part to latent demand and the availability of new systems. Many instrument suppliers timed new product introductions to coincide with a resumption of market demand, which paid off. Likewise, aftermarket purchases picked up as inventories of supplies ran low and testing requirements increased. This was particularly true for academic and government labs, but also for general industrial, electronics, pharmaceuticals and biotechnology. Demand was very strong in emerging markets, especially China, India and Latin America, but also in North America. Europe and Japan were laggards.

Prospects for 2011 look good, but will likely be a bit lower than the vigorous rebound in 2010. Accordingly, IBO forecasts that the analytical and life science instrument industry will grow 5.6% to approximately $42 billion in 2011, which is about what we experienced in 2008 before the “great recession” befell us. Regionally, IBO expects the same pattern to continue, with emerging markets growing at above-average rates and the major developed markets showing lower, but still respectable, growth.

In October 2010, the International Monetary Fund (IMF) issued its World Economic Outlook forecast, which indicated that world output would increase 4.2% in 2011. Advanced Economies are expected to grow about 2.2%, but Emerging and Developing Economies will likely expand at 6.4%. Since then, the IMF, the Organization for Economic Co-operation and Development (OECD) and other forecasting groups have become steadily more upbeat. So the economic trends are encouraging.

In general, end-user markets all represent good growth potential. Even the oil and petrochemicals, metals, chemicals and polymers industries will grow in the 2%–3% range, while food and beverage, biotech and academia will continue to be leading growth segments, expanding at 6% to almost 9% (see page 14). The government and pharmaceuticals market will grow at about the overall average rate. MS (see page 6) and atomic spectroscopy (see page 8) will represent the faster-growing technique categories. But within each category, fast or slow growing, individual techniques can exhibit above-average growth potential.

Column Graph: Instrument Industry Revenues and Growth

’05 ’06 ’07 ’08 ’09 ’10 ’11

Revenues 31.072 33.1876 36.070 8.143 37.204 39.757 41.981

% Change 5.9% 6.8% 8.7% 5.7% -2.5% 6.9% 5.6%