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|NDT.net Issue - 2013-05 - NEWS |
|By Nikhil Jain, Research Analyst, Frost & Sullivan, Test & Measurement Research Practice
The nondestructive testing (NDT) industry can be broadly classified into two segments namely, equipment and services. Although there is a certain degree of overlap in competition between these two segments with a few competitors offering both equipment and services, the market dynamics differ across equipment and services. This article will provide a brief overview of the NDT equipment market by covering the trends impacting the market across different technology and end-user industry segments.
The market for NDT equipment is highly mature and concentrated. The top two competitors in the market, GE Measurement and Control Solutions and Olympus NDT Inc, occupy approximately 50 percent of the market. The remaining 50 percent is shared by more than 150 companies. Only GE Measurement and Control Solutions has product lines across various technologies such as ultrasonic, radiography, magnetic and electromagnetic, visual, and penetrant testing. Other participants offer equipment in one or two technology segments, with ultrasonic and radiography segments having the most number of participants.
Frost & Sullivan’s research estimated the global NDT equipment market at $1,489.9 million in 2012, growing at a compounded annual growth rate (CAGR) of 8.1 percent. Of this, ultrasonic testing contributed 31.1 percent to the market revenue making it the largest technology segment in the market. Radiography was the second largest at 30.3 percent and visual inspection was the third largest segment, contributing 21.3 percent to the market revenue. In the next five years, radiography is expected to overtake ultrasonic testing as the largest technology segment in the NDT equipment market. This is an extremely interesting trend, as the volume of ultrasonic test equipment is expected to be significantly higher than radiography, but the average price for ultrasonic test equipment is declining at a faster pace than radiography equipment. Therefore, the revenue to be generated from the radiography segment is expected to be higher than the ultrasonic segment. To put things into perspective, revenue wise, radiography is expected to grow at a CAGR of 8.7 percent and ultrasonic test equipment at a CAGR of 7.4 percent. From and end-user industry perspective, power generation and oil and gas are the two largest segments contributing 21.8 and 20.9 percent, respectively, in 2012. Both these industries are expected to grow at a CAGR of 7.5 percent. Although the market is mature and is characterized by a slow rate of change of technology, over the past decade there have been important advancements in technology. Phased array ultrasonic has seen exponential growth with the introduction of truly portable instrumentation. Digital radiography has witnessed wide-scale adoption in the electronics, automotive, and aerospace industries. Remote visual inspection (RVI) is witnessing incremental adoption, with many aerospace industry codes mandating its use for inspection in certain applications. Overall, there has been greater adoption of advanced NDT technologies. Conventional NDT technologies are evolving steadily with improvements in performance and functionality of the equipment.
The key growth driver for the NDT equipment market is the need to extend the useful life of aging assets and running these assets at high capacities. The costs and challenges involved in building new infrastructure have resulted in a desire for end-user industries to extend the useful life of their existing infrastructure. Thus, these existing assets have aged, especially in North America. The average age for a refinery or power plant in the United States is more than 40 years, yet these assets are required to run at high capacities. In the Middle East, existing refineries have been increasing their capacity utilization due to the shortage of refined oil in the market. This shortage has been created by the trade-related sanctions imposed by the United States and the European Union on Iran. Running these aged assets at higher capacities may result in failure if the assets are not inspected periodically. The level of maintenance required to preserve these assets and run them at high capacities has created an immense demand for NDT inspection. This demand for inspection is driving the growth in the NDT equipment market and is expected to have a continued positive impact for the foreseeable future.
A global trend being witnessed in the NDT industry is the lack of skilled technicians. As such, there is a constant supply of NDT technicians. However, many of them are only certified and do not possess the necessary skills to perform inspection at an acceptable level of quality. In addition, many training institutes are not updated with the latest equipment and technicians are trained on old equipment that have been phased out of the market. This is a major hindrance to growth of NDT equipment manufacturers, as it limits the adoption of newer, advanced technologies and products. Over the past year, NDT equipment manufacturers have identified this trend and set-up their own training centers or academies. Even though most NDT equipment manufacturers provided NDT training earlier, it was offered only as an after-sales support service. However, equipment manufacturers such as GE, Olympus NDT, and Carestream NDT have opened up training centers that provide training independent of purchase of the equipment.
In the recently published Frost & Sullivan study titled 'Analysis of Global Nondestructive Test Equipment Market', detailed analysis on current and future trends has been provided, in addition to a comprehensive view on the latest market and technology trends, revenue projections, competitive landscape, and growth opportunities in this market space.
Frost & Sullivan also conducts extensive research in the areas of nondestructive testing, material testing, condition monitoring, and NVH testing among others. For further information or any comments, suggestions or queries please contact the author.
Nikhil Jain is a Research Analyst within Frost & Sullivan’s Test & Measurement research group. For more information on Frost & Sullivan’s Test & Measurement research or any questions on this article, you can contact Jeannette Garcia, Corporate Communications at Jeannette.Garcia@frost.com or 210.477.8427.