Instrumentation Industry, 2008

U.S. Market Overview

The instrumentation industry manufactures a diverse range of technically advanced products. The industry can be segmented into three major sub-sectors: (1) measuring and controlling instruments, used in most manufacturing plants; (2) laboratory and optical instruments, which are crucial to the pharmaceutical industry for drug research, equally important to the clinical diagnostics sector, and are also used extensively in scientific research; and (3) electronics test and measuring instruments, used by the electronics industry to test semiconductors and other components; by the computer industry to test disk drives; and by the telecommunications industry to test voice, data, and video infrastructure.

The United States is the world’s largest producer and consumer of instrumentation, with a domestic market valued at $33.7 billion in 2007. U.S instrumentation industry shipments totaled $38.9 billion in 2007, an increase of 5 percent from 2006 levels. U.S. instrumentation shipments represent approximately 37 percent of the estimated $105 billion global market. U.S. exports of instrumentation products were $28.4 billion in 2007, while imports totaled $23.2 billion, resulting in a net trade surplus of $5.2 billion. The U.S. instrumentation industry employed 170,255 workers in 2006. Eighty-eight percent of all U.S. instrumentation manufacturers are small-to-medium sized companies.

The U.S. instrumentation industry is fragmented, highly competitive, technologically advanced, and globally integrated. As with other high tech industries, restructuring, consolidation, mergers and acquisitions are key elements of growth in today’s marketplace. Global competition drives new standards of quality while spurring manufacturing cost reduction. The keys to success include selling price, the performance capabilities of an instrument, state-of-the-art technology, technical support, and aftermarket service.

As the largest instrumentation market, the United States has attracted many foreign investors looking to gain market share, set up distribution and service centers, and build manufacturing facilities. Since the 1990s there have been many large and small investments in the U.S. instrumentation sector by foreign companies, with the bulk of this investment coming in the form of acquisitions by large European firms. The manufacturing operations of the acquired U.S. companies have been fully integrated into the global supply chain.