2 MIN. READ
The industrial valve industry in the global economy is a balancing act of demand and uncertainty.
There are many factors that simultaneously boost and detract from their sales figures. Thankfully, the necessity of these devices is helping to sustain the industry until global economic forces stabilize.
Industrial valves manage and control fluid flow in all types of pipe systems.
Industrial valves are used in manufacturing plants, oil and gas production, aircraft operations, municipal water supply systems and beverage production to name a few.
There are several main variants that perform different functions based on construction methods but ultimately they all serve the same basic purpose.
International Distribution and the Trade War Ripple Effect
Industrial valves are vitally important around the world. Industrialized and developing nations both have a need for flow control of water and other critical fluids. A single water treatment plant may have thousands of valves installed. All of these valves must work properly or else citizens may lose access to fresh water.
This puts industrial valve manufacturers in a unique position of building equipment that is mandatory for the health and welfare of entire cities.
Industrial valves are also needed for suppliers that have their manufacturing plants overseas, primarily in China. Because of this interconnectivity, valve sales are strongly affected by international market forces.
According to MNI, compiler and publisher of the industrial data that powers IndustryNet, the international distribution rate for industrial valves is 58%, which is double the rate of the manufacturing industry at large.
This reach has negatively affected the sector thanks to a tumultuous year in global trade compounded by the effects of multiple tariffs. Despite $15.9 billion in sales, there was only 0.16% growth compared to the previous year, according to data reported to MNI.
Luckily, the sector has actually increased the number of employees overall by 3.4%, in preparation for the eventual end to the trade war.
Additionally, industrial valve manufacturers import raw materials at nearly double the rate (24%) of the overall manufacturing industry (11%). Reliance on foreign supply chains and material sources played havoc with production costs and reliability as manufacturers scrambled to adjust to constantly changing policies.
This has had a chilling effect on certain non-critical purchases as buyers try to balance quality with cost.
Yet another issue affecting industrial valves is the fact that they are used in many of the products listed on the tariff schedules.
Radical reductions in the demand for certain machines and products resulted in lower demand for industrial valves.
Aircraft, ships, cars, power generation equipment and machines used in production are all products high in valve count that were affected by the tariffs.
With only 520 companies, this ripple effect has a disproportionally large impact on each of the 29,210 employees in the sector.
Company Distribution
Regional data collected by MNI explains where industrial valve companies have the highest concentrations. Nearly half (48%) are located in the South, totaling 248 companies.
Next up on the list is the Midwest with 21%. The least populous regions are the Northeast with 17.7% and the West with 12.7%.
Searching for a Valve Manufacturer?
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Article Sources:
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https://www.flexport.com/data/hs-code/848140-safety-or-relief-valves
http://www.valvemagazine.com/magazine/sections/features/9721-tariff-pressure-builds-on-valve-industry.html
http://www.stlpipesupply.com/blog/types-of-industrial-pipe-valves-explained/
https://www.zionmarketresearch.com/news/global-industrial-valves-market
https://www.flexport.com/data/hs-code/841182-gas-turbines-of-a-power-exceeding-5-000-kw
https://www.cnbc.com/2019/10/02/us-to-issue-tariffs-on-airbus-planes-but-travelers-will-pay.html
https://www.industrialvalvenews.com/updates/global-industrial-valves-market-in-the-oil-and-gas-industry-2019-2023-growth-analysis-and-forecast/
