Demand for portable power solutions is likely to increase as consumer awareness levels rise and price-to-performance ratios improve, creating strong potential for significant market growth. Increasing incidences of power outages in North America is the key driver for the portable generator set market, as people no longer take electricity for granted and are seeking solutions to manage such situations. These types of situations will not end anytime soon as companies struggle to find precise and effective measures to counter downed-power issues.
The power generator industry has been undergoing tremendous growth in many markets overseas, including China, Africa, Middle East and various other parts of the world. A good example of this growth could be seen in 2005, with China's total export of power generators and generator sets exceeding 92 million units at a value of over $1.5 billion, which was a striking 60 percent increase over exports the previous year.
Of all those portable power generators, about 57 percent of the shipments consisted of portable generator sets with output power of less than 10kW. The main catalyst that led to the huge jump in exports was driven mainly by strong demand from Africa and the Middle East, with sales to these markets exceeding well over $400 million. Furthermore, China was responsible for shipping a hefty number of units to the US, which also contributed to the growth of China's generator and generator sets industry. Exports to this market amounted to more than $323 million in 2005. Demand for energy is growing at a phenomenal rate.
The Middle East is at the heart of the hunger for power, providing real challenges to policy makers and industry leaders to meet the needs of the region. With an estimated required investment over $50 billion, the Middle East power generation and transmission and distribution market offers massive opportunities for businesses to invest and profit. About five per cent of the world's population lives in the Middle East.In times of rapid expansion, the growing economy and expanding population becomes increasingly hungry for energy to power their developments and portable power generators fill some of this void.Thanks to the outstanding demand and positive earnings, suppliers of power generators in China will continue to export to the Middle East and Africa, where demand for the product continues to grow.
Eventually, the suppliers will look to make a mark on the US market where there is definitely room for expansion especially since recent weather situations during the intense hurricane season, highlighted the importance of portable power.When the lights go out across China, Cummins emergency generators come on.
Factories use them to battle against the rolling brownouts that routinely knock them off the grid. In China, portable generator sets, are typically used on construction sites. Many people rely on their generators in a country where infrastructure is overstretched by rapid growth. Another driving element of the international success of portable power generators has to do with the stringent environment-protection and safety regulations in these developed markets, that has increased the appeal of power generators.
In addition, many power generator makers in China are working in partnership with universities and research institutes to develop additional safety features and lower exhaust emission and operating noise. Some are even commissioning foreign design companies to help develop specific generator models, parts or components. These makers, especially those marketing products under their own brands, are emphasizing the quality and performance of their generators. Although China's boom has been the strongest factor driving sales, it is also pushing up the price of raw materials like steel, copper and oil, and squeezing profit margins too. The pinch in the prices of raw materials will eventually have to be passed to consumers. The manufacturers can only absorb so much of this additional cost. As a result, if you have been considering the purchase of electric power gensets for your home or business, now would seem like the best time to buy, in advance of any price increases in the industry.
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