Machinery and Equipment
The post-pandemic rebound is over
Last update – October 2022
SENSITIVE RISK FOR ENTERPRISES
Strengths & weaknesses
- High barriers to entry since a lot of investments in technology and capex need to be made in order to keep up with innovation and expansion.
- Strong growth potential in robotics and process automation. Benefits from ongoing industrial innovation and automation. All sectors today are looking for efficiencies, and being able to bring products to the market that meet these expectations represents a great opportunity for gaining market share.
- Heterogeneity of clients and markets, serving companies and people in all regions and in all kind of business/end-markets.
- Highly cyclical sector, meaning that companies in the sector are hit hard during recession periods due to falling demand.
- Complex and fragmented supply chain, which makes the sector vulnerable to periods of supply constraints, as was the case of the 2020 pandemic-linked lockdowns worldwide
- Capital-intensive sector, as large investments and R&D expenditures are necessary to grow the business and be able to offer new products that adapt to the new demands of the different sectors that require machinery.
- Susceptible to commodity access and prices, since metals such as aluminum, copper, steel and nickel are highly used for machinery-building and their prices have been quite volatile lately.