Market overview for elevator products and services

Aggregate planetary demand for lift / escalator merchandises and services is projected to increase 5.6 % per twelvemonth through 2009 to more than $ 20 billion. Fueling additions will be economic recovery and enlargement in the mature markets of the developed universe, coupled with on-going industrialisation among the less advanced states of Asia.

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The universe lift market rose at a comparatively healthy gait throughout most of the 1990s in a by and large sanguine planetary macroeconomic clime. Basically strong economic growing in developing states was briefly interrupted in 1997-1998 by a fiscal crisis steeping many East Asian and Latin Americans states, every bit good as Russia. Fallout form the crisis continued to adversely impact the lift market into 1999 and 2000, as tendencies in the lift market tend to dawdle developments in the macro economic system by a few old ages. Subsequently, as the emerging market began to retrieve, growing in Western Eur0pe and North America was depressed in the aftermath of the planetary economic lag precipitated in the US, although by 2004 a recovery was evident in most markets.

In the developed universe, additions will reflect an expected recovery in office building, as vacancy rates come down in major planetary fiscal centres such as Tokyo and London. Over the long term, development of the residential sector, particularly in the mostly untapped US market where single-family places predominate, will besides make chances, supported by once more populations and ordinances such as the Americans with Disabilities Act. In Europe, acceptance of new EU-wide safety ordinances for bing lifts will bolster the modernization/upgrade service section.

The fastest growing is anticipated in the universe ‘s developing parts – Asia, Latin America, Eastern Europe, Africa and the Middle East. In developing states, market enlargement will reflect increased urbanisation, as virtually all constructions in big third-world metropoliss require lifts. Aftermarket services are besides non good established, even in more developed states such as South Korea and hence offer a ample potency market which major planetary providers such as OTIS are actively working to develop.

China, which has already emerged as the largest planetary lift market in unit footings, will go on to log explosive additions, with the generation of a moneymaking service aftermarket bolstering the robust OEM concern. Almost half of the addition in rider and cargo lift unit gross revenues will be attributable to China, where per capita lift usage remains less than 10 % of that typical of Western Europe.

TABLE III – 1

WORLD ELEVATOR MARKET BY REGION

( billion dollars )

Item

1994

1999

2004

2009

2014

World Urban Population ( mil individuals )

2516

2811

3119

3443

3790

Bldg. Construct Expend ( bil 2000 $ )

2900

3324

4254

5270

6661

$ elevator/urban capita

10

11

12

15

17

$ elevators/000 $ concept

8.6

9.0

9.1

9.6

9.9

World Elevator Market

24.9

30.0

38.5

50.5

66.2

North America:

4.0

5.0

5.8

7.4

8.9

United States

3.6

4.5

5.1

6.5

7.8

Canada & A ; Mexico

0.5

0.5

0.7

0.8

1.1

Western Europe:

11.7

13.8

16.1

19.3

23.0

Asia/Pacific:

6.5

8.0

12.4

18.4

27.0

China

0.9

1.2

3.5

6.9

12.3

Japan

4.5

5.3

6.4

7.9

9.5

India

0.4

0.6

1.2

1.7

2.5

Other Asia/Pacific

0.7

0.9

1.3

1.9

2.7

Other Regions:

2.7

3.2

4.2

5.5

7.4

Latin America

1.0

1.1

1.4

1.9

2.5

Eastern Europe

1.2

1.4

1.8

2.3

3.0

Africa/Midest

0.5

0.7

1.0

1.3

1.9

Beginning: The Freedonia Group, Inc.

CHART III – 1

WORLD ELEVATOR MARKET BY REGION, 2009

( $ 50.5 billion )

Beginning: The Freedonia Group, Inc.

3.1.1 Regional Profile

Given the modernised economic systems, well-developed industrial and commercial sectors, comfortable consumer populations and extremely evolved building/nonbuilding building substructures in topographic point throughout the developed universe, most OECD ( Organisation for Economic Co-Operation and Development ) states maintain big markets for elevator/escalator merchandises and services relative to population and size of the economic system. These include the US, Western Europe, Japan ( the largest planetary market in value footings, reflecting the state ‘s aged, urban population and rigorous safety criterions ) and Australia and New Zealand. The states of Eastern Europe, particularly Russia and certain of the other more industrialised provinces of the former Soviet Union, besides comprise markets of some significance, but they tend to be much smaller in both absolute and relation footings than those of the major Western states.

However, the fastest turning markets for lift merchandises and services are typically found within the development parts, particularly Asia and to a lesser extent Latin America and Africa/Mideast every bit good. As legion states within these parts work to industrialise their economic systems, they are confronting lifting substructure enlargement and modernisation demands, which has led to extensive edifice building activity.

Another cardinal facet of the industrialisation procedure in most states is increasing urbanisation, as persons and families migrate from rural countries to metropoliss to take part in the turning economic chances available at that place. Such kineticss are positively correlated to the development of markets for construction-related merchandises like lift systems ; furthermore, as the figure of systems installed additions, markets for related maintenance/repair and finally modernisation, services tend to emerge as a affair of class.

3.1.2 Multinational Parameters & A ; Trade Flows

Like most industries, the lift concern has become progressively international in range in recent decennaries. The physical nature of lift / escalator system mostly, bulky, affecting legion constituent parts, etc. , renders them non easy movable. In add-on, lift makers frequently prefer to hold local fabrication capacity, which allows them to break fulfill local demands ( e.g. , ordinances and criterions ) and cultivate moneymaking aftermarket service relationships. As such, foreign trade per Se is non as extended in the industry as in most lasting goods fabrication concerns. Foreign trade is some what more prevailing in the replacing parts and constituents sections of the concern.

However, transnational investing on portion of the taking manufacturers ( and even a few of the mid-sized and smaller 1s ) is highly prevailing. This takes the signifier of direct ownership of overseas based subordinates, fabrication installations and other assets and after gross revenues serving and proficient support webs. Furthermore, in recent old ages at that place has been an attempt on the portion of major manufacturers such as OTIS and KONE to consolidate their planetary operations and displacement production capacity to lower cost locales in the underdeveloped universe, which has increased the importance of cross-border trade.

As the planetary lift industry continues to reconstitute and consolidate, the place base of operations of the major participants is going progressively less relevant to the competitory kineticss of the concern, with a smattering of transnational companies ruling the concern in most geographic countries – particularly with regard to merchandise fabrication. The service section remains well most disconnected, but it excessively is consolidating quickly. As planetary companies maker and put in their systems in given states, they have a direct inducement to put in after gross revenues serving webs in these states every bit good, which is besides motivating consolidation in the service section of the concern. Such kineticss are expected to go more instead than less marked traveling frontward, as the economic sciences of the concern favour big companies with a transnational range.

3.2 Demand by Product & A ; Service

Elevators, escalators and related merchandises are used to physically travel persons, cargo and sometimes other points from one topographic point to another within a edifice, installation or some other designated topographic point. The motion occurs either vertically ( in the instance of promoting and raising equipment ) , at an slope ( escalators ) or horizontally ( traveling paseos ) . Elevators and escalators are therefore built-in constituents of many types of constructions, particularly those with multiple floors or degrees and/or affecting an extended sum of physical infinite.

Aggregate universe demand for lift merchandises and services is projected to increase 5.6 % per twelvemonth through 2009 to more than $ 50 billion, an betterment from the 1994-2004 gait. Fueling additions will be an upswing in new system installings, attach toing expected recovery in nonresidential edifice activity in Japan, Western Europe and the Americas. This will assist to countervail some deceleration in residential edifice building, which is an of import index of elevator demand outside of North America. Preventing faster additions – particularly on the merchandises dice is the high grade of adulthood of the lift / escalator market in the developed universe, which has prompted taking sellers to aim high growing markets in the Pacific Rim and other developing countries which hold the greatest potency for incremental additions in new installings traveling frontward.

Besides fueling growing will be technological inventions in missive coevals system including microprocessor based controls and detectors, distant monitoring, automated public presentation and bring forth farther demand, at both the new installing and modernization/upgrade terminals of the concern. In add-on, retrofits to follow with altering edifice codifications and federal authorizations will rejuvenate the upgrade/modernization services market, particularly in North America and Western Europe.

TABLE III – 2

WORLD ELEVATOR EQUIPMENT & A ; SERVICE MARKET

( billion dollars )

Item

1994

1999

2004

2009

2014

Bldg Construct Expend ( bil 2000 $ )

2900

3324

4254

5270

6661

$ elevators/000 $ building

8.6

9.0

9.1

9.6

10.0

World Elevator Market

24.9

30.0

38.5

50.6

66.3

Equipment:

8.8

10.9

15.0

21.2

29.5

Passenger & A ; Freight

6.2

7.5

10.2

14.1

19.0

Escalator clauses & A ; Moving Walkways

0.8

1.0

1.6

2.6

4.0

Parts & A ; Other

1.8

2.4

3.2

4.6

6.6

Servicess:

16.1

19.1

23.5

29.3

36.8

Installation

2.6

3.2

4.1

5.5

7.3

Modernization & A ; Repair

13.4

16.0

19.4

23.8

29.5

Beginning: The Freedonia Group, Inc

CHART III-2

WORLD ELEVATOR EQUIPMENT & A ; SERVICE MARKET, 1994-2014

( billion dollars )

Beginning: The Freedonia Group, Inc.

3.2.1 Equipment

World demand for lift and escalator merchandises totaled $ 15 billion in 2004 billion in 2004, accounting for about 40 % of the entire elevator/escalator market. For present intents, lift merchandises are defined to include rider and cargo lifts and associated merchandises.

Demand is projected to post a 7.1 % per annum addition through 2009 to $ 21.2 billion. Growth will stem from bettering cyclical kineticss, in peculiar a resurgence in nonresidential building disbursement – particularly in the cardinal office/commercial/lodging and industrial edifice sectors. Additions will be best for machine room less ( MRL ) lifts, which will profit from enlargement of the planetary retail and ( particularly ) transit sectors.

3.2.2 Passenger & A ; Freight Elevators

Global demand for rider and cargo lifts is projected to lift 5.7 % per annum through 2009 to about 4,40,000 units, of which over 60 % will be the newer machine room less ( MRL ) type. Along with bettering cyclical kineticss and continued secular growing in the underdeveloped universe, additions will be fueled by increased incursion of less traditional market sections, such as single-family abodes. The latter is a cardinal consideration in North America, where individual household lodging is more prevailing than in Europe and Asia. Even in the latter parts, nevertheless, once more of the population will make chances in the residential section, as lifts are progressively designed into low-rise edifices which would antecedently hold relied entirely on stairwaies. As a consequence, the installed base will spread out from 7.4 million units in 2004 to 9.2 million in 2009.

In value footings, demand for rider and cargo lifts will turn 6.6 % per twelvemonth to $ 14 billion in 2009. While intense planetary competition and greater trust on low footmark units will keep down cost additions, higher fuel and energy costs and the spread outing proficient complexness of latter coevals lift system, which can be priced at a premium relation to earlier designs, will lend to monetary value rising prices.

Passenger and cargo lifts, as the name implies, are general purpose raising systems designed to vertically transport persons and trade goods between different floors or degrees within a individual edifice or installation. From a technological point of view, basically all modern rider and cargo lifts are either the hydraulic ( powered by pressurized liquid ) or grip ( electric powered ) type ; the latter can be either geared or gearless. Hydraulic came into prominence during the 1950sm exceling the geared market which was outstanding prior to that clip and stay the dominant type in the US. Traditional grip lifts remain in broader usage in Europe and Asia, although in Europe they have been widely supplanted by MRLs since the mid 1990s.

The newer MRL lift types incorporate the cogwheels and control into the lift shaft, instead than a separate machine room, and therefore supply greater design flexibleness, every bit good as energy and ( in some instances ) cost nest eggs. MRLs have made important inroads in Western Europe and will go on to perforate North America, Asia and other parts. Furthermore, while ab initio suited merely for edifices upto 7 narratives, MRLs have non been adapted for usage upto about 25 narratives, well broadening the possible market.

TABLE III – 3

WORLD PASSENGER & A ; FREIGHT ELEVATOR MARKET

( million dollars )

Item

1994

1999

2004

2009

2014

World Elevator Market

24893

30015

38536

50550

66300

% Passenger & A ; Freight

24.8

25.1

26.5

27.8

28.6

Passenger/Freight Elevator Market

6175

7532

10220

14050

18950

North America:

665

977

1160

1700

2100

United States

585

873

1000

1480

1800

Canada & A ; Mexico

80

104

160

220

300

Western Europe

2155

2645

3125

3940

4850

Asia/Pacific:

2575

2975

4660

6650

9525

China

425

550

1600

2800

4700

Japan

1650

1800

2000

2325

2700

India

220

305

470

745

950

Other Asia/Pacific:

280

320

590

780

1175

Other Regions:

780

935

1275

1760

2475

Latin America

305

360

450

615

840

Eastern Europe

265

275

425

595

825

Africa/Midest

210

300

400

550

810

000 $ /Unit

31.8

33.0

30.8

32.0

33.0

P/F Elevator Market ( 000 Unit of measurements )

194

228

332

439

575

Machine Room

194

203

232

164

100

Machine Room Less

25

100

275

475

% New

3.8

3.8

4.5

4.8

4.9

P/F Elev. Installed Base ( 000 Unit of measurements )

5120

6035

7355

9220

11700

Beginning: The Freedonia Group, Inc.

Elevator related service grosss are generated when new systems are installed and so later as installed systems are repaired and maintained over their utile lives. Major redevelopments or ascents on bing systems are oftern undertaken every bit good ; for present intents this type of activity is classified under repair/modernization. Not surprisingly given their much larger installed base, elevating/lifting systems account for a well higher portion of the entire service market than escalators and traveling paseos, in both the new installing and repair/modernization sections.

TABLE III – 4

WORLD ELEVATOR SERVICE MARKET BY TYPE

( billion dollars )

Item

1994

1999

2004

2009

2014

World Elevator Market

24893

30015

38536

50550

66300

% Servicess

64.6

63.7

61.0

58.0

55.5

Elevator Service Market

16.1

19.1

23.5

29.3

36.8

Installation

2.6

3.2

4.1

5.5

7.3

Repair & A ; Modernization

13.4

16.0

19.4

23.8

29.5

Repair & A ; Maintenance

11.6

13.5

15.8

18.3

21.0

Modernization/Upgrade

1.8

2.5

3.6

5.5

8.5

Beginning: The Freedonia Group, Inc.

3.2.3 Installation

World grosss generated from the installing of new elevator/escalators systems are projected to increase 6.1 % per twelvemonth through 2009 to $ 5.5 billion. Installation grosss will turn slightly more easy than will new lift and escalator equipment demand. This reflects the fact that elevator/escalator sellers have been working sharply in recent old ages to take down the installing costs of their system, in orde3r to increase new concern volume.

TABLE III – 5

WORLD ELEVATOR INSTALLATION REVENUES BY REGION

( million dollars )

Item

1994

1999

2004

2009

2014

World Elevator Service Market

16079

19118

23491

29300

36800

% Installations

16.5

16.5

17.4

18.8

19.7

Installation Grosss

2650

3153

4087

5500

7245

North America:

372

484

530

735

880

United States

338

440

464

650

765

Canada & A ; Mexico

34

44

66

85

115

Western Europe

963

1162

1350

1670

2020

Asia/Pacific:

1093

1236

1831

2570

3600

China

144

188

563

1025

1725

Japan

752

804

872

990

1120

India

87

126

168

255

345

Other Asia/Pacific:

110

128

228

300

410

Other Regions:

222

271

376

525

745

Latin America

81

97

123

170

235

Eastern Europe

80

86

134

190

265

Africa/Midest

61

88

119

165

245

Beginning: The Freedonia Group, Inc.

3.2.4 Repair & A ; Modernization

Grosss derived from the proviso of fix, care and upgrade/modernization services on bing elevator/escalator system are projected to increase 4.2 % per annum through 2009 to $ 23.8 billion, which compares favourably to longer term historical norms.

Repair and care grosss will spread out merely 3.0 % per annum to $ 18.3 billion in 2009, draging all other merchandise and service sections. In much of the underdeveloped universe, care disbursement is perceived as an unaffordable luxury ; edifice proprietors and directors tend to wait for an lift to neglect before they will put in maintenance/repair. However, there is grounds that this is get downing to alter as major Western and Nipponese lift companies work to educate their equipment clients about the importance of everyday service. Service demands tend to be highest in Japan, where for cultural grounds lift failures are considered to be unacceptable.

As in instance of lift and escalator systems themselves, the proviso of related repair/maintenance services has benefited significantly in recent old ages from the application of a advanced engineering. What has become particularly outstanding of late are computing machine based monitoring tools that can observe system mistakes ( or even possible mistakes ) and watchful service technicians instantly. Repair/maintenance services can be performed on a contract footing, or on an as needful service call footing for edifice proprietors and other operators that do non keep contracts.

In add-on, there is considerable possible for concern activity on the modernisation upgrade side of this market, in footings of retrofitting bing systems to be compatible with new constructing codifications, the Americans with Disability Act ( in the US ) , the safety Norm for Existing Lifts 9SNEL-in Western Europe ) and other authorizations. A figure of the taking lift sellers have in recent old ages launched modernisation bundles designed specifically to follow with the demands of these authorizations. Examples include Schindler ‘s SCHINDLER 6200 and KONE ‘s MAXISPACE. The latter allows users to replace a 4 rider auto with a 6 or even 8 rider lift.

More by and large, legion edifice proprietors will desire to upgrade bing elevator/escalator systems to integrate the latest technological progresss along such parametric quantities as improved safety and enhanced public presentation and energy efficiency features, and this will supply farther impulse to the repair/modernization service market overall. Modernization grosss are forecast to lift 8.8 % yearly through 2009 to $ 5.5 billion, doing this the fastest turning section of the lift concern. Modernization undertakings can run from replacing controls and interior adjustments, to put ining new doors or other structural constituents, to integrating advanced electronics based detectors and monitoring tools, to finish redevelopments of full lift cabs or replacing of escalator stepss.

TABLE III – 6

WORLD ELEVATOR REPAIR & A ; MODERNIZATION REVENUES BY REGION

( million dollars )

Item

1994

1999

2004

2009

2014

World Elevator Service Market

16079

19118

23491

29300

36800

% Repair & A ; Modernization

83.5

83.5

82.6

81.2

80.0

Repair & A ; Modernization

13429

15965

19404

23800

29450

North America:

2518

2981

3529

4190

5025

United States

2217

2646

3145

3735

4485

Canada & A ; Mexico

301

335

384

455

540

Western Europe

7731

8918

10355

12115

14240

Asia/Pacific:

1848

2492

3609

5110

7165

China

55

110

270

645

1350

Japan

1516

1957

2664

3430

4275

India

42

95

210

410

745

Other Asia/Pacific:

235

330

465

625

795

Other Regions:

1332

1574

1911

2385

3020

Latin America

472

554

688

865

1095

Eastern Europe

742

852

983

1180

1445

Africa/Midest

118

168

240

340

480

Beginning: The Freedonia Group, Inc.

3.3 Demand by Market

Elevator related merchandises and services are utilized in a wide array of edifices and installations having multiple floors or degrees, every bit good as in certain single-floor and even non-building type scenes. Large, well-trafficked installations with multiple degrees – office edifices, establishments such as infirmaries and schools, section shops and other retail constitutions, hotels and motels, mills and warehouses, etc. , be given to be the most intensive users of lift merchandises and services.

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