Waiting to hit bottom

These are certainly hard times in the global manufacturing sector. Every morning my e-mail has countless news items about plant closings ...

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Niche Industrial laser markets report activity

These are certainly hard times in the global manufacturing sector. Every morning my e-mail has countless news items about plant closings, employee layoffs, production cutbacks, corporate bankruptcies, and other not so great news. It almost makes me envy the ostrich that buries its head in the sand at the sign of danger; but then I remember that I am a human not a bird and that life has to be faced. We must take the good with the bad, and we surely had many years of good before it came time to pay the piper.

The depth of the recession in the world's laser industries has already surpassed that of the early 1990s, when a severe two-year recession sent the industrial laser market spinning and recovery to pre-recession levels took another three years. According to the pundits, we, here in the U.S., are well into the second year of this recession and none are prepared to forecast when it will hit bottom and start toward recovery.

It's a daunting time to be a manufacturer. Many are already running lean, with essentially zero inventories, struggling to keep their skilled employees in place for the recovery. The idea is that with everyone running lean there will be a sudden influx of orders that will require immediate filling.

Last month I attended a preview in Munich of the June Laser World of Photonics. There Messe Munich organizers spoke optimistically of the expected increased exhibitor participation even though they could not provide hard numbers citing last-minute decisions by some companies as well as changing space considerations. The organizers have added a fourth hall in anticipation of increased exhibitors, but the planned use of the new hall for production engineering has been modified, and part of the floor space will be used by optics exhibitors. Visitor attendance at the 2007 event was up 14% but organizers were less optimistic about reaching this level in 2009.

At the January Photonics West show in San Jose, CA, we were told by show organizers that all exhibit space had been sold, and a very few cancellations were offset by companies on the space waiting list. Attendance at this show and conference were up slightly from 2008.

While in Munich I also walked the exhibit floor of the Photovoltaic Technology Show 2009 Europe. This was my first time at this show so I couldn't compare the light to medium attendance to prior years. Exhibitors I spoke with claimed they were seeing quality leads even though the numbers were down. And PV is the hot subject right now, especially for industrial lasers.

So how do these shows affect my view of the world markets? The two laser shows are big ones. Photonics West was judged a success by the majority of exhibitors, and they spoke of active markets in science, R&D, solar power, medical, and some niche industrial laser markets. I heard the same from the dozen Laser Munich exhibitors I interviewed. They too are finding success with niche markets, however only one of these companies was a large industrial supplier, so it was a narrow view of prospects.

ILS has revised the 2009 market forecast for industrial lasers published in January, doubling the expected losses in all categories, as a result of the latest quarterly company reports. You can find it on the ILS website, www.industrial-lasers.com. If the recession continues longer, I expect we will be revising our forecast again. But pulling my head from the sand, I am beginning to think that the bottom will be evident by the end of summer.

David A. Belforte
belforte@pennwell.com

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