The COVID-19 pandemic had a major adverse impact on the bearings industry, with a double-digit drop in global demand recorded in 2020 due to a number of factors:
- The leading global end use markets for bearings – particularly motor vehicles and aerospace equipment – experienced severe declines.
- Severe currency depreciation in some parts of the world also disrupted the bearings supply and demand:
- Both consumers and manufacturers also became more price sensitive during the period of economic turmoil, leading to the greater use of less expensive bearings and a contraction in the global bearings market in value terms.
- As people drove less and industrial enterprises used machinery less intensively, global replacement bearing demand fell and sales of bearing components decreased.
Though weakness continued in many parts of the world in early 2021, global economic conditions are expected to stabilize as the year goes on, and manufacturing activity will rebound as nations get greater control over the pandemic and vaccination rates expand.
A new Freedonia Group analysis projects global demand for bearings to rise 5.2% per year to $100 billion in 2025, with all bearing types expected to recover swiftly from 2020 lows. Highlighted below are some of the key trends expected to fuel market growth through 2025.
Increasing durable goods manufacturing activity, particularly of motor vehicles
Global sales of bearings used in aerospace equipment and motor vehicles are projected to grow at a fast rate through 2025, with automobiles in particular offering strong gains (44% of all new product demand). Both industries struggled in 2020 due to restrictions on travel and halting of production due to the pandemic:
- OEM automotive bearing demand will benefit from rebounds in production of automobiles, trucks, buses, and other motor vehicles (e.g., vans), while aftermarket sales will benefit from significant increases in use of motor vehicles by businesses and consumers as COVID-19 restrictions are lifted.
- In aerospace, advances in the construction of drones, satellites, and rockets, together with the increasing use of more sophisticated aerospace bearings, will provide the impetus for gains. The return of international travel as restrictions imposed in 2020 are lifted will also support gains.
However, a semiconductor shortage will limit motor vehicle production in 2021 in multiple countries around the world (particularly the US), at least in the short term.
Rising foreign investment in developing manufacturing sectors
As the global bearings market returns to growth in the wake of the COVID-19 pandemic, many of the traditional drivers of market gains – such the rapid development of durable goods industries in the Asia/Pacific region and rising living standards in the Africa/Mideast region – will once again return to the forefront. Though foreign investment is rising in manufacturing sectors in other developing parts of the world as well, trends in the Asia/Pacific will continue to have an outsize effect on the global market, as the region is forecast to account for 61% of all new bearing demand between 2020 and 2025:
- Led by China, the region experienced less severe turmoil in 2020 than many regions, and its recovery is expected to begin at an earlier date because multiple regional countries handled the pandemic effectively.
- Additionally, the region’s highly competitive durable goods industries have strong growth prospects, and foreign investment in the manufacturing sectors of regional countries (e.g., India, Thailand) will recover at a particularly swift pace during the post-pandemic period.
- The region also features a developing aerospace equipment industry and is a major supplier of ICE motorcycles, in addition to e-bikes, which have strong growth prospects through 2025.
R&D focusing on value-added application-specific solutions
During the COVID-19 pandemic, the bearings industry experienced reduced strategic investment and R&D spending, and delayed product rollouts, exacerbating 2020 losses. As industrial enterprises ramp up production to meet rebounding demand for a wide range of durable goods in 2021, however, the use of high-performance bearings will also recover.
While bearings are considered a mature technology, important advances continue to be made in product design that improve product performance and extend lifespan. For example:
- Many leading producers are utilizing the Industrial Internet of Things (IIoT) to manufacture so-called “smart bearings”, which can provide predictive maintenance in aerospace and defense, wind turbine, railway, automotive, and other applications with challenging requirements.
- Global production of hybrid and electric vehicles (HEVs) is expected to rise significantly through 2025, resulting in surging demand for bearings that promote electrical grounding.
- Additionally, manufacturers of bearings are increasing their product offering for robotics applications as the use of robots in the automotive, electronic, pharmaceutical, and aerospace industries surges. To accomplish the various tasks involved, robotics applications utilize high-precision miniature bearings and thin-section bearings.
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About the Author:
Peter Kusnic is a Content Writer with The Freedonia Group, where he researches and writes studies focused on an array of industries.