The UK pump market has experienced good growth during 2013 and 2014, influenced by the recovery in the manufacturing and construction sectors, and further growth of 2% is forecast for the end of 2015. The pumps market has also been boosted in the past two years by the growth of capital investment in the power generation sector as older plants have been replaced by new generation ones.
Aftermarket sales of parts and service make up a substantial proportion of the revenues of UK pump suppliers, which provides suppliers with some degree of stability, even during periods of recession. This is due to the relatively high installed base of pumps in the UK market. The pump market can be divided into two core product sectors, centrifugal pumps and positive displacement pumps, with centrifugal pumps accounting for around 60% of the total market.
Key factors underpinning future market growth include the replacement of ageing infrastructure in the power generation sector, the need to boost housebuilding, and the impact of climatic change leading to a need to improve flood defences. Other key market influences include the growth of the pump hire sector. Offsetting these are the fall in investment in the oil & gas sector resulting from the collapse of oil prices. In addition, the uncertainties regarding future capital investment in the water and wastewater sector created by the change in the way budgets are set under the new Asset Management Plan (AMP6) may also affect demand.
Current forecasts indicate that the UK pump market is likely to show a reasonable level of growth of around 2-3% per annum up to 2019, reflecting growth in construction, together with continuing significant investment in the power generation sector, which is likely to be a key driver of growth in the UK pumps market. This is initially via investment in new generation gas-fuelled power stations, and in the longer term, from new nuclear build. Other long term development opportunities include new technologies such as carbon capture and storage and tidal lagoons. In the water and wastewater sector, however, there is likely to be more emphasis on repair and maintenance rather than new capital expenditure compared with previous Asset Management programmes. However, investment in flood defence programmes may increase demand for pumps such as submersible pumps and puddle pumps.