Generator set market powers up for growth

IHS estimates that the world market for gensets will continue to see growth into the year 2015.

By Greg Johnson, IHS Inc. July 30, 2014

IHS estimates that the total world market for generator sets (gensets) was worth just under $16 billion in 2013. More than 1 million units were shipped globally with growth in 2014 ramping up toward an even stronger year in 2015. IHS defines a generator set as the packaged combination of a reciprocating engine and an electric generator, most often referred to as an alternator, used for the purpose of producing electricity in commercial and industrial applications.

Generator sets are used for emergency standby, continuous prime power, and peak shaving applications across a wide range of industry sectors that tend to be quite volatile from year to year. For many suppliers, growth in the past two years, 2012 and 2013, has been quite flat, with the overall market showing little growth in terms of revenue. So far, 2014 has been a more promising year, with many companies reporting mid-single-digit growth and increasing order volumes. Some manufacturers are even expecting double-digit growth rates in specific regions and product markets.

espite the expected general economic stabilization that IHS believes will provide support to the generator sets market in 2014 and 2015, one important factor expected to spur growth in the market is increased investment for infrastructure projects in regions such as the Middle East and Southeast Asia. Infrastructure investment supports a number of industries relevant to the generator sets market, including: commercial buildings, construction, rail, telecommunications, and water and wastewater. Sales in the Middle East will be further boosted by reconstruction efforts in its war-torn areas and are forecast to grow by 12.4% in 2015. The rail industry in Asia is forecast to experience revenue growth of 15.3% in 2015. Generator set sales across Southeast Asia will experience rapid growth as the region pushes forward several ambitious freight and commuter railway projects.

EMEA was the largest regional market for generator sets in 2013, comprising approximately 37% of global market revenues during the year. Sales are forecast to grow more slowly in the EMEA region than the other regions as the Eurozone is expected to continue to struggle to break out of the economic woes the region has experienced since 2009.

In contrast, the Asian market is projected to be the fastest-growing region globally in 2014, with generator set revenues expected to grow at a rate of 7.1%. India is forecast to have the fastest growth within the region due to power shortages in the country. Southeast Asian countries like Thailand will see a high level of investment in new data center construction. With high growth expected in Asia, many manufacturers are in the process of expanding their presence in the region, either through new facilities or distribution partnerships. However, Southeast Asian countries are forecast to experience the bulk of this activity, partially due to increasing wages in China.

Greg Johnson is a market research analyst with IHS industrial & medical technology group. He joined IHS in August 2011 and his research focus is on the generators market including low voltage generators, medium and high power generators, wind generators, and generator sets. Greg holds a BBA in finance/economics from the University of Mary Hardin-Baylor. He is based in Austin, Tex. Edited by Anisa Samarxhiu, Digital Project Manager, CFE Media,