Industrial Production Trends: Drop in Korea, Uptick in China

Figure 1 shows the mostly flat trend of industrial production in the US over the latest available 12-month period from September 2023 to August 2024. During the same period, the EU and Japan reported some steep declines, while China and Korea were cruising above 4% for most of 2024. In light of political instability and strengthening Chinese competition, Korea fell abruptly into recession territory in September, together with Korea’s Manufacturing MI (see figure 2). However, Figure 2 shows a recovery of the sentiment among Korea’s manufacturers in November.

Manufacturing MIs: Recovery in Korea, Drop in the EU

As a leading indicator, the manufacturing MIs were also in recession territory, below 50 points, for the primary regions targeted by automation and machine vision equipment. The sentiment among producers in the European Union has been lagging other regions for over two years, especially dragged down by a tough economic climate in Germany. Yet, in November, Italy and France saw major drops in their manufacturing MI readings that drove the decline of the EU.

On the other hand, US manufacturers were optimistic through the first half of 2024, but the score dipped below the 50-line from July onwards. Even the growth-spoiled Chinese manufacturing industry did not contribute to better readings as it was lagging behind the government-set target of a 5% annual increase. The Korean manufacturing sector, driven by its strengths in semiconductors, automotive, and defence, saw its sentiment drop in September as Chinese car manufacturers gained global market share.

The TTM revenues of the 14 major manufacturing automation suppliers analyzed here aggregate to approximately $110 billion. The trend for 2024 is flat, showing much less volatility compared to the machine vision space.

However, company performances vary significantly depending on geographic focus and industry exposure. Companies like B&R-owner ABB and Atlas Copco, which owns ISRA Vision, Photon Focus, Quiss, and Vision Tools, see growth rates between 2.5% and 4%. Meanwhile, US and Japanese heavyweights Rockwell Automation and Omron anticipate declines between 10.8% and 8.0%.

Looking ahead, analysts expect these players to recover with moderate growth rates between 5% and 7%, though regional and industry-specific performance differences will persist.

This chapter is an excerpt of our Q4 2024 Market Bulletin. Members of our #VisionCrunch community have received it weeks before its official publication. Join now and get your free copy here.

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The current state of the machine vision industry, along with its primary target—industrial manufacturing automation—sets the stage. After a relatively stable 2023, revenues took a nosedive in Q1 and especially Q2 of 2024. Fortunately, Q3 showed some recovery, and the overall revenue growth for 2024 is expected to be just under 2.0%. Considering a strong US dollar, analysts are optimistic and forecast growth rates of around 8-9% for 2025 and 2026.

Basler took the hardest hit among publicly listed companies, with a year-over-year (YoY) decrease in its trailing twelve-month (TTM) revenue in USD of 28.1% in Q2. After weak Q3 TTM results in 2023, the revenue decline in Q3 2024 shrank to 16.8%. Their guidance for 2024 suggests a relatively soft landing at -5.9%, with a forecasted growth of 7.5% in 2025 and 13.4% in 2026. TKH Group’s 2D and 3D vision segment saw a moderate YoY decline in Q3 but predicts a strong Q4.

Component manufacturer and system provider OPT Machine Vision also experienced a 27.8% drop in Q2, with Q3 ending slightly better. For the whole of 2024, the company indicates a trend of just -3.2%, being under pressure from government-funded machine vision players in China, like many others are.

Stemmer Imaging, focused on Europe, saw a dip in Q3 with a 25.0% decline in TTM revenue. Meanwhile, heavyweights Zebra Technologies and Cognex, expect revenue growth rates of +8.3% and +8.1% in 2024, respectively, compared to a weak 2023 for both. Teledyne’s largest segment is Digital Imaging. The group forecasts its TTM revenue to be flat by the end of Q4 compared to 2023, despite inorganic growth. In contrast, Keyence is expected to grow by 3.6% this year and almost 12% in 2025.

Companies focusing more on vision solutions rather than components, such as Jenoptik and Antares Vision had very positive YoY growth rates in the first nine months of 2024 of up to 12% (TTM, YoY). Their guidance for the whole year shows +5.8% and just 1.1%, though. Reportedly, machine vision orders have already been picking up again, especially from the semiconductor sector and non-cyclical industries, with a regional focus on Korea and North America.

This chapter is an excerpt of our Q4 2024 Market Bulletin. Members of our #VisionCrunch community have received it weeks before its official publication. Join now and get your free copy here.

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The Manufacturing PMIs for November reveal mixed signals across key global economies (see Fig. 1). Hence, Machine Vision suppliers are even more urged to set a clear regional focus in their sales and marketing strategy.
India has sustained its dominant position, showing robust growth, while Spain continues to outperform within the European Union. Vietnam’s PMI remains above the 50-line after rebounding to growth territory in October, further indicating further stabilization from the slowdown observed in September.
Meanwhile, Korea bounces back by 1.9 points into growth sentiment. China’s November PMI keeps indicating a stabilization which historically meant a growth of around 5%.

Followers of our social media profiles and members of our VisionCrunch community, are already familiar with the economic indicators we use to monitor the manufacturing industry by country. If you are not, please check out this explanation of Manufacturing PMI and year-over-year change in Industrial Output.

In North America, the United States have reported a much less pessimistic sentiment following Donald Trump’s victory in the presidential election. Also, Mexico showed marginal improvements in their PMI readings. However, both economies remain entrenched in contractionary territory, struggling to regain consistent momentum.

Germany and Austria have interrupted their prolonged declines, but their PMI readings are still among the lowest in Europe, reflecting persistent political and economic headwinds. The sentiments in Italy and France got a special hit in November where France approaches German levels and also Italy’s value dropped below 45, dragging down the overall reading of the EU.

While global PMIs show pockets of resilience, the broader manufacturing recovery remains fragile, with developed economies lagging behind emerging markets in momentum. The months ahead will determine if these economies, especially the EU, can overcome structural challenges and regain growth traction.

The year-over-year changes in industrial production outputs for September are now available. Figure 2 shows a mostly flat trend of Industrial Production in the US over the latest available 12-month period from October 2023 to September 2024. During the same period, the EU and Japan reported some steep declines, while China and Korea were cruising above 4% for most of 2024. In light of political instability and strengthening Chinese competition, Korea fell abruptly into recession territory in September together with Koreas Manufacturing PMI (see figure 1).

India has returned to significant growth after a brief pause, reinforcing its position as a strong performer among emerging economies. Conversely, Mexico faces further contraction, deepening its recessionary trajectory. Germany’s industrial decline has accelerated in September again while economist do not see a recovery from recession before 2026.

Manufacturing PMI readings signal broad improvement across several key economies, Italy and France are major exceptions.

We provide you with a dedicated page where you will always find the latest available readings of Manufacturing PMIs and the Industrial Output of the target countries of Machine Vision suppliers.

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