June 14, 2012, Rob Long
As Accutek’s newest marketing assistant, I have been hard at work in the past month. One of the things I have learned here at Accutek is that in order to sell something, you have to understand what it is you’re selling and how and why it benefits the person you’re selling to. Because of this, I have found myself reading trade magazines during every free moment I have, in order to learn more about the industries that Accutek serves and the challenges our clients face. _sm.jpg)
I was recently handed the May 2012 volume of Quality Magazine and I came across an article discussing the material testing equipment market. I was interested in this article because Accutek has recently entered this market and our success is highly dependent on the health of this market. Also, the material testing equipment market trends will affect our core market as well, since it relates to the health of the mechanical testing services market as a whole. I was so interested in this topic that, after reading the article, I also did a small amount of research on the history and current state of the market. I have shared my findings below.
Where it’s been:
Traditionally, the material testing equipment market itself has been very top heavy. A small number of large companies control well over half of the market share. These large corporations have made it difficult for smaller firms to enter the market, because of their control of the majority of the market and mind share, as well as significantly more accreditations and strong reputations. Since customers in this industry need reliable and accurate results, they tend to prefer to use a company with a well-established track record and numerous accreditations. Also, the larger corporations often have a much larger marketing and advertising budget, which allows them to have a much stronger presence than the niche competitors.
Like the world economy as a whole, the material testing equipment market experienced a downswing during 2009. Equipment users from industries such as manufacturing, aerospace, and energy cut down on their amount of testing expenditures as well as equipment purchases in response to economic hardships. In other cases, firms who previously performed testing in-house, decided to outsource testing to independent labs to reduce costs and were no longer investing in testing equipment. Just as the market began to crawl out of the recession last year, the 2011 nuclear disaster in Japan crippled the market once again. Many major players in the market adopted a ‘wait and see’ approach to their testing needs once again, which led to large decreases of equipment purchases during this time period.
Where it’s headed:
Recently, novel opportunities have been opening up in many fields, such as biomedical and nanotechnology. Many large corporations do not have experience in these relatively new fields and aren’t as nimble as smaller firms in refocusing resources and priorities. This presents an opportunity for smaller firms in niche markets to take advantage of these new opportunities, and grow them into large sources of revenue. 
Here in 2012 the market has recovered once again, bolstered by the rapid growth of the medical device, composite, and automotive fields. The market generated over $500 million dollars in revenue in 2011, and is growing at a marginal rate of just over 3% per year. Projections have the market generating over $600 million in revenue by 2015. Many experts attribute the market’s resiliency to the consistency of material testing standards and specifications. These standards have remained largely unchanged for decades, resulting in accuracy and consistency that other fields of testing have not experienced. This lends a large amount of credibility to the results generated through material testing, and solidifies its role in the product development and material certification process.
Others attribute the market’s resiliency to the fact that much of the materials testing performed is a mandatory step in the manufacturing process. In the medical device, automotive, aerospace, and many other industries, testing is a governmental requirement that cannot be omitted. Thus, even in economic hardship, testing is still imperative to many companies, who must cut costs in other areas.
Whatever the reasons, it is difficult to debate the importance of the material testing equipment market. This equipment has allowed engineers and designers to perfect the millions of products that we use every day. The safety and quality of life we enjoy today would not be possible without the technological progress that material testing has made possible.
Hunter Everett
June 14, 2012 at 2:17 pm
One of the areas I’ve noticed growth occurring is private aerospace. I think it will be interesting to see how this surge will impact our business.