As emerging economies invest in new projects in water and electricity generation sectors and global oil and gas production increases, these directly affect the demand for valves. Moreover, there are various other factors as well that help valves industry to grow.
As the process industry expands businesses across the various sectors, it creates opportunity for other sectors such as instrumentation and equipment to grow as well. Valves is one such industry that is witnessing increasing demand due to various reasons – one of them being the oil and gas sector. The report ‘World Industrial Valves to 2017’ by Freedonia Group suggests that the global demand for industrial valves is projected to grow 5.1 per cent per annum through 2017 to reach the mark of more than $80 billion.
On one hand, advances taking place in the emerging economies such as India and China in water and electricity industries contribute to the demand of valves. On the other, in developed countries, continued advances in manufacturing output are expected to provide growth in the process manufacturing market. However, the major role in the increasing demand for valves is played by global oil and gas industry.
The valve industry will automatically gain benefits from increasing production of oil and gas as it requires new investment in pipeline infrastructure. As a result, oil producing nations such as those in the Middle East will post gains due to rising drilling activity. Similarly, in the US, demand for valves is likely to benefit from the boom in hydraulic fracturing in the oil and gas market, as well as from the improved economy.
Role of Maintenance and Repairs for Valve Market
However, this market is not only dominated by new purchases that the oil and gas industry would make. This industry is also challenged on account of process, logistical and safety issues, which cause it to look to valve suppliers and other vendors to minimize operational and maintenance problems.
According to the report ‘Industrial Valves: World Market’ by the McIlvaine Company, the operators will pay $6 billion for these services in 2015. When the expenditures for valve repair parts and services are added, the total addressable market next year may go up to $9 billion. This revenue forecasts do not include the $10 billion for new valves, which the oil and gas industry is expected to spend next year. Therefore, the total market for valve suppliers in oil and gas is slated to be $19 billion in 2015.