But despite increasing demand for flowmeters, their manufacturers will be hard pressed to see significantly higher profits due to pricing competition.
And aided by greater demand for more advanced and higher-priced flowmeter technology, this relatively mature $940 million (€765m) market is projected to experience steady revenue growth over the next few years.
Various EC directives related to environmental issues and processes in the pharmaceutical and other process sectors are forcing companies to regulate their production practices, according to Frost & Sullivan. Monitoring the flow of fluids makes for more streamlined processes, but also helps to save costs
This has become an important issue during the economic slowdown, notes the report. The harder operating environment creates a need for improved productivity through optimisation of manufacturing processes and this is likely to drive the flow sensors market in the long term to reach $1.13 billion by 2009.
"Supporting this growth potential are technological innovation and continuous product developments in the flowmeter market," said Frost & Sullivan research manager Mik Sabiers.
He pointed to a growing preference for intelligent instruments, which apart from measuring flow rate can provide data on the performance of the instrument. These devices use in-built microprocessors to decode the information and interpret many other variables.
Improvements in accuracy, reliability and maintenance requirements are driving the adoption of two newer flowmeter technologies - ultrasonic and coriolis mass - and dislodging conventional flowmeters such as electromagnetic, turbine and positive displacement, noted Sabiers.
In 2002 ultrasonic held 7.7 per cent of total market revenues and coriolis mass held 15.5 per cent. The strongest advance is expected for ultrasonic recording a 2002-2009 compound annual revenue growth rate of 7.2 per cent, significantly above the market average rate of 2.6 per cent.
Profits pegged back
The high potential for unit sales, however, is not likely to drive profits. Intense competition in a market with more than 60 participants has sparked price wars, which in turn, is driving down profit margins, according to the report. And competitive pressures are expected to continue to remain high as the leading suppliers look to enhance their overall position.
In total the top five market participants account for more than half of all revenues, a value that is increasing over time. Nevertheless, the scope for greater growth for these larger suppliers is expected to be more limited unless they investigate alternative avenues such as penetrating more specialised niches.