UPS hardware market looks set to struggle in 2012 forecasts IMS Research

July 18, 2012 // By Paul Buckley
Market research analyst, IMS Research reports that UPS sales were especially slow in 1Q 2012, resulting in only two percent growth in the global market year-over-year.

IMS Research's quarterly tracking of the global UPS market indicated that UPS hardware revenue growth continued to slow after a rather sluggish second half of 2011. While little growth isn’t too surprising given the state of the global economy, the fact that large-system UPS sales dropped two percent year-over-year this quarter only provides further evidence of the struggles that the market will face in 2012.

After a rather upbeat beginning to 2011 in UPS sales, Western Europe still faced a struggling economy and overly cautious consumers because of the unresolved economic problems of Greece, Spain and Portugal. As a result, the region’s sales began dropping off as early as 3Q 2011 and continued to shrink in the first quarter 2012. Single-phase sales fell five percent and the >100 kVA market contracted more than 15 percent year-over-year.

IMS Research’s Senior Analyst Lori Lewis, explained: “The ongoing struggle in Western Europe has really forced many in the region to restrain from making any kind of large financial decisions and to suspend purchasing new UPS. What’s even more troubling is that the market doesn’t appear to be turning around any time soon without any kind of resolution on the underlying economy. Adding further to the woes of Europe, Middle East and Africa (EMEA), the emerging markets in both Africa and the Middle East, where hopes of UPS market growth were high, also fell short of seeing growth in 2011 over 2010.”

After experiencing a less-than-average five percent year-over-year growth in 4Q 2011, Asia’s sales continued to remain slow in 2012 with just under nine percent growth year-over-year in the first quarter. China’s struggles intensified as interest rates climbed and lending froze; resulting in declining >100 kVA UPS sales. Lewis reveals: “The Chinese Government’s attempt to control an overheating economy by raising interest rates came at a time when the global economy was cooling off as pre-recession pent-up demand was satisfied. Slowing exports to