January 2017 Issue
Firing Line Report
Managing Editor, Sea Technology
For the latest edition of our annual industry survey, we once again received responses that span the globe. Our pool of respondents broke down into: 46.7 percent from the U.S., 13.3 percent from Canada, 24.4 percent from Europe, and 15.6 percent from Asia.
Looking Back, Looking Forward
Most respondents, or 37.8 percent, said their sales volume rose in 2016.
The rest of the respondents were split in reporting lower and level sales volume: 31.1 percent said they experienced less sales than in 2015, while the same percentage reported sales volume at the same level as 2015.
Looking ahead to 2017, an overwhelming majority of respondents reported an outlook of rising or level sales compared to the year 2016: 47.7 percent said they expected their sales to rise in the year ahead, while the same percentage said they expected sales to be even with 2016 numbers.
Only 4.5 percent of respondents expected lower sales volume in 2017.
We asked participants in our survey to report on which product categories were the most active in their sales breakdowns for 2016. The most active product categories were: sensing/measuring/sampling systems, software/data processing and multibeam sonar. These were followed by what respondents reported as the “somewhat active” product categories of: acoustic sensor systems, communications/telemetry, side scan sonar and underwater vehicles.
Marine Renewable Energy
As it is an emerging category in the marine industry, we like to keep tabs on the marine renewable energy market. Participants came back with a lot of comments on this growing market, with one describing it as having “very large potential.” Respondents cited several technology categories affected by the growth of marine renewable energy: meteorology, undersea monitoring sensors, hydrographic survey, marine survey/exploration, underwater robotics, tidal energy, wave measurement devices, and sub-bottom and side scan sonar. One respondent said the marine renewable energy market is growing because of “a decline in demand for oil sensors.” Another wrote: “Greener ships. Great potential.”
We asked the survey participants about their customers, and respondents reported that academia/research institutions provided them with the most orders in 2016, followed by civilian government agencies, offshore oil and gas, other ocean technology manufacturers and the military. Of the above customer groups, the one with the greatest growth potential was the government, both civilian and military, as reported by respondents. Government civilian agencies “are continuing to promote commercial development of the sea,” explained one respondent, while another said that so much marine potential has yet to be explored and inventoried. Government is the “most predictable” customer, a respondent stated.
One respondent gave a detailed response: “The military naval area has greatest growth potential,” citing a “trend toward littoral water operations for surface vessels and submarines in both ASW and MCM domain. Navies request new capabilities/sensors with shallow-water features (0 to 200-m water depth). We see increasing demand for acoustic sensors on smaller vessels/platforms like fast patrol ships and unmanned surface vessels (USV). Submarines demand active sensors for mine and obstacle avoidance and submerged navigation (bottom mapping and forward-looking sonar).”
We asked survey participants to tell us how the current level of federal budget spending is affecting their business. We received mixed responses pertaining to military spending: 35.9 percent said there was little effect on their business, 33.3 percent said there was a significant effect, and 30.8 percent said there was a moderate effect. As for federal funding from civilian agencies, the majority of respondents reported a moderate effect from the current level of funding.
Domestic, International Outlook
The survey asked respondents to comment on the mood of the marine industry both domestically and internationally.
The overall picture from responses about domestic markets pointed to a neutral mood, with these markets acting about the same as previously, and in some cases taking a downturn.
However, some respondents did write positive descriptions of their domestic market. One respondent wrote: “Cautiously optimistic, with some concerns about Brexit.” Another wrote: “Fisheries are optimistic. Offshore farming will be new growth area. Underwater mapping and survey optimistic. Military marine industry optimistic—slowly changing towards unmanned platforms and less people. Smaller platforms but higher number of vessels.” One respondent cited research and development as very active. Another wrote: “Very strong mood exists for marine industry in Japan.”
As for the international market outlook, the overall picture from survey responses also showed a neutral mood. Some cited a “depressed”, “glum”, “blah” and “cautious” market.
However, there were notes of hope, with some respondents describing a “growing”, “buoyant”, “good” and “neutral to positive” outlook for the international market.