Executive Summary
The UK expenditure on process plant equipment in 1997 was estimated by Key
Note to be £5.33bn. Although this represented a 1.9% increase over the
1996 figure of £5.23bn, it is a fall of 17.3% compared with the 1992
figure of £6.25bn. Much of this fall is related to the slow recovery rate,
after the capital expenditure cuts in the process industries took effect in
1993 onwards.
The process plant industry examined by this report includes the manufacturers
of equipment, ranging from the larger items of plant such as distillation
columns, evaporators, pressure vessels and dryers. The report also includes
smaller items such as pipework components, pumps, filters and valves; to
control gear items such as switchgear, instrumentation and control computers.
The main end customers for process plant include chemicals, pharmaceuticals and
biotechnology product manufacturers; oil and gas producers; petroleum product
refiners; electricity generators; iron and steel producers; water and sewage
treatment plants; and food and drinks producers.
The process plant industry was affected by the recession, although the
reduction in spending has come later for the industry than for other sectors
that have a shorter lead time for product procurement. The recovery from the
recession is also later for the process plant industry as new projects have a
lengthy design period before orders are placed on manufacturers. Competition
for overseas orders is intense due to the fall in orders in the European and US
home markets of the major process contractors.
The water industry was under strong pressure to conform to European Union (EU)
water quality standards and invested heavily in plant and process equipment in
the early to mid-1990s. The purchasing levels of this sector are now greatly
reduced. In the oil and gas production markets, cost cutting exercises and the
fact that no new large fields have been discovered in offshore UK waters has
reduced the capital expenditure of this sector. The food industry has been
subject to intense price pressures from its major customers, the supermarkets,
during the recession, and most expansion plans have been shelved as a result.
The total UK expenditure on process plant is forecast to be £4.53bn in
2002. This represents a fall of 15% against the 1997 figure, with the oil and
gas production market being most heavily affected, falling to 49.6% of its 1997
market value.
Seventh Edition 1998
Edited by Simon Howitt
ISBN 1-85765-783-7
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