SOURCE: Freedonia Group

April 12, 2006 11:12 ET

World Elevator Demand to Reach $50 Billion in 2009

CLEVELAND, OH -- (MARKET WIRE) -- April 12, 2006 -- The world market for elevator and escalator products and services is forecast to expand 5.6 percent annually through 2009, surpassing $50 billion. Gains will be supported by expansion of global nonresidential building construction as economic growth and new business formations bring vacancy rates down in key segments such as offices and lodging. This will help to offset slowing in multifamily residential building, which is an important source of elevator demand in Europe and Asia. These and other trends are presented in "World Elevators," a new study from The Freedonia Group, Inc., a Cleveland-based industry research firm.

In general, new systems -- including elevator/escalator equipment sales and related installation services -- will enjoy better prospects than aftermarket parts and services as nonresidential building picks up, although the aftermarket will also continue to develop in key markets such as China. In the passenger and freight elevator segment, global unit sales will expand 5.7 percent annually to about 440,000 units, of which over 60 percent will be the newer machine-roomless (MRL) type. The total installed base will expand to more than nine million units. In value terms, demand will rise 6.6 percent annually, surpassing $14 billion. However, price inflation will remain subdued, despite higher energy and material costs, reflecting increasingly stiff competition in the MRL segment and greater reliance on manufacturing in low cost venues such as China and Eastern Europe. Even more impressive gains are projected for escalators and moving walkways, with demand slated to grow 10.0 percent annually to $2.6 billion in 2009.

The fastest growth is anticipated in the world's developing regions -- Asia, Latin America, Eastern Europe, Africa and the Middle East. China, which has already emerged as the largest national elevator market in unit terms, will continue to log explosive gains, with the development of a lucrative service aftermarket bolstering the robust OEM business. Nearly half of the new units added will come in the Chinese market, where per capita elevator use remains less than ten percent of that typical of Western Europe.

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