German VDMA says photonics market grows steadily

Munich, Germany--The German Engineering Federation (VDMA) released a new report at LASER World of Photonics 2013 that examines 10 photonics sub-segments in all and analyzes them in detail for the 2005-2011 period. Importantly, it also provides future growth outlook of the sub-segments from now until 2020.

The study projects that the worldwide photonics market will grow to around $791 billion in 2020, corresponding to an average nominal growth rate of 6.5%—about half as much as the projected growth rate of worldwide gross domestic product (GDP). So the photonics sector will also continue to make a significant contribution to prosperity and help create new jobs in the future. The German photonics industry is expected to post a domestic production volume of nearly $56.6 billion by 2020, which equates to an average nominal growth rate of 5.6% per year. At the same time, the core areas will continue to become increasingly important. The number of employees—including those of suppliers—will rise to about 165,000.

Intelligent system solutions, beyond the boundaries of industrial sectors and technologies, are both a growth engine and a challenge for photonics. In particular, they offer opportunities for the German and European segment, which must face competition in low-wage countries. Significance of the German core areas will continue to increase and, with regard to production and employment, make up nearly 80% of the total in Germany by 2020, the study says. In the lighting market, the most promising growth prospects lie in the high-end segment of modern light management systems; however, Germany’s role in light source production is declining. A strong niche position in the high-end area has also been established by German manufacturers that supply equipment for optical networks.

The mixed picture that photonics’ various product groups present is undoubtedly attributable to the different cyclicality of the individual sub-segments. At the same time, the different export rates among the sub-segments make it possible to maintain the turnover from German photonics production much more stably than the comparatively volatile overall economic growth in Germany and Europe. Laser manufacturing technology, for example, reported a strong 9% increase in turnover for 2012—consolidated worldwide on a euro basis—thereby taking full advantage of dynamic world market growth. Machinery construction overall grew by 2% in 2012.

Spectaris, the German Electrical and Electronic Manufacturers' Association (ZVEI), and the German Federal Ministry of Education and Research (BMBF) worked with the VDMA on the report. For more information, please visit http://photonik.vdma.org/.

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