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Global Pump Market Outlook

Spring 2017

Sample Material

Copyright © 2017 Oxford Economics


Spring
2017 Contents

b
Preface [included in sample] i
Overview [included in sample] 1

Outlook for pump using sectors


Agriculture 5
Basic Metals 7
Chemicals 9
Construction 12
Food & Beverages 15
Mechanical Engineering 17
Mining 19
Oil & Gas 22
Pulp & Paper 25
Pharmaceuticals [included in sample] 27
Utilities 29
Outlook for pump markets
North America 32
US 33
Canada [included in sample] 35
Mexico 37
South America 38
Brazil 39
Europe 40
Germany 41
France 43
Italy 45
UK 47
Norway 49
Austria 51
Belgium 51
Czech Republic 51
Denmark 52
Hungary 52
Spain 52
Sweden 53
Asia 54
China 55
Japan 57
South Korea 59
Spring
2017 Contents

Outlook for pump markets continued


India 61
Singapore 63
Middle East & Africa 64
Economic background
US 66
Canada [included in sample] 69
Mexico 72
Brazil 73
Germany 74
France 77
Italy 80
UK 83
Norway 86
Austria 89
Belgium 90
Czech Republic 91
Denmark 92
Hungary 93
Netherlands 94
Poland 95
Spain 96
Sweden 97
China 98
Japan 101
South Korea 104
India 107
Singapore 110
Saudi Arabia 111
UAE 112
Appendices
Glossary [included in sample] 113
Data methodology [included in sample] 116
Forecast tables 121
Spring
2017 Preface

A new global pump market forecast report


What’s happening?

Oxford Economics, one of the world’s foremost independent global economic forecasting firms, has been
commissioned by Europump and the Hydraulic Institute to produce a pump market forecast report across 71
countries, 16 end-use sectors and 5 pump categories

Why?
An annual market forecast report previously produced by European Industrial Forecasting (EIF) has been
discontinued and the firm has ceased operation.

Will the coverage be identical to the EIF report?


Our coverage will be as broad, but not as granular, as in the EIF report. This is by design and follows extensive
discussions with Europump and the Hydraulic Institute, who are in complete agreement with our methodological
approach as well as the structure and content of the report.

We are not intending to replicate the methodology, coverage and style of analysis of the previous report. Rather, our
aim is to produce a set of forecasts that are transparent in their construction and modelling framework, are rigorously
underpinned by macroeconomic and sector-specific forecasts, and add maximum value to users in their business
planning and decision making.

Will your data be comparable to EIF data?


Readers will notice differences—in some cases considerable—between our estimates of market size and those of
EIF. The most significant one is that we estimate market size in China to an order of magnitude larger than that
estimated by EIF, which also makes our estimate of the global pump market significantly larger.

We strongly believe that the methodologies underlying construction of the data sets and econometric modelling must
be transparent and credible. In the spirit of transparency, we invite you to read and the data appendix (which provides
details on how we construct our data) and the glossary (which provides details on the definitions and codes for each
of the pump types, as well as definitions of end use markets). They are intended to help readers understand why our
estimates of market size may differ from their prior-held views or those published by EIF.

Is there scope to increase the granularity of the forecasts?


Yes, to the extent that we gain access to additional credible market information to underpin them. For this reason, we
will hold regular meetings with Europump, the Hydraulic Institute and other key stakeholders to encourage such
exchange of information, and well as invest in desk research to search for other sources of information. We expect
that this engagement process will allow us to include progressively greater granularity.

Oxford Economics recognises this inaugural report is far from perfect. But it does provide what we believe to be a
solid starting point that will continually improve with each subsequent edition.

Jeremy Leonard
Director of Global Industry Services
Oxford Economics

+44 20 7803 1429


jleonard@oxfordeconomics.com

May 2017

Page i
Spring
2017 Overview
Overview
World: Pump consumption by region (2016)
GDP growth rebound to benefit pumps North
Global pump consumption is forecast to expand by 1.7% America, 16%
South
this year to around US$124bn after an estimated decline America, 3%
of 2.9% last year.

This improvement is against a backdrop of an acceleration Middle East &


Africa, 7%
in world GDP growth following the weakest outturn last
year since the 2008-09 financial crisis, GDP growth is
Nonetheless, several headwinds will prevent a sharp Asia Pacific,
54%
acceleration. The first of these relates to inflation—with oil Europe, 20%
prices currently well above levels from a year ago, the
boost to consumer spending and investment from low
Source: Oxford Economics
inflation is over. Secondly, the upturn in global trade is
expected to be more muted than it has been in past
economic recoveries, given heightened protectionism.
Finally, amid considerable geopolitical and economic
uncertainty around the world, the recovery in investment World: Pump consumption

US$bn Consumption (LHS) % year


spending will be subdued. We thus expect the acceleration 140 Growth rate (RHS) Forecast 30
of world GDP growth to be modest: 2.7% this year 25
120
compared to 2.3% in 2016. 20
100
15
Oil & gas a drag on world industrial outlook 80 10
We are forecasting a sharper pick-up in industrial activity 60 5

than for the economy as a whole. Of the main pump- 40


0

customer sectors, activity in the more cyclical industries, -5


20
-10
such as chemicals, is forecast to accelerate more sharply,
0 -15
while growth in less cyclical sectors such as food &
2001 2004 2007 2010 2013 2016 2019
beverages and fuel refining, albeit healthy, is expected to Source : Oxford Economics

remain unchanged. The laggard of the pump-consuming


sectors is oil & gas extraction, which in global terms is
expected to contract. There will though be sharp regional
differences though—budgetary constraints in oil-producing
Middle Eastern countries will hold back investment and World: Industrial production and GDP
% year
output there, offsetting the rebound in North American Industrial produiction Forecast
15
production. World oil & gas production should pick up from GDP
2018. 10

5
China continues to drive pump demand
The most rapid growth is expected in Asia Pacific, where 0

demand is forecast to rise by 2.7%, boosted by a 3.4%


-5
increase (in US dollar terms) in China, the world’s largest
market. Indeed the Asian market, and China in particular, -10
has made rapid gains over the past decade – in 2005,
-15

China accounted for a paltry 7% of the global pump customer sectors where it has also seen its share of
market, compared to an estimated share of 40% by 2016. global output rise significantly. Over the next five
This broadly mirrors China’s rapid growth in end-use years, we

Page 1
Spring
2017 Overview
expect China to remain the fastest growing market of the 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020
Source : Oxford Economics/Haver Analytics

Page 2
Spring
2017 Overview
main pump-consuming countries. However, growth will be
much slower compared to the past decade as Beijing’s
World Output: Utilities, construction and
shift away from investment-led growth is expected to result % year agriculture
Utilities
in slower (albeit still healthy) growth in end-use sector 8 Construction Forecast
Agriculture
activity and investment spending more generally. By 2021, 6

Chinese pump consumption is expected to reach 4


US$65bn, around 44% of the global market. A key risk to
2
our Chinese pump forecast, particularly in the near term, is
0
the possibility that the Chinese authorities may scale back
their growth targets. In this circumstance, Chinese pump -2

consumption could be much weaker than in the baseline. -4

In contrast to China, and the Asian region more generally, -6

2001 2005 2009 2013 2017 2021


Europe has seen its share of the global pump market Source : Oxford Economics/Haver Analytics
almost halve over the same period and by 2016, it was an
estimated US$30bn, around a quarter of the world market.
The global financial crisis and ensuing Eurozone crisis
took its toll on economic and industrial activity, hitting
investment spending especially hard. With economic World Output: Oil & gas and mining
growth now on firmer footing, we expect stronger growth in % year
Oil & gas
12 Mining Forecast
pump consumption in the key European markets, reflecting
10
pent-up demand for pumps. After expanding by 1.7% in
8
2017, consumption is forecast to expand at an average 6
annual pace of 4.8% over the rest of the forecast period 4
reaching around $US37bn by 2021. Risks to our near-term 2
forecasts are skewed to the downside, owing to the risk 0
that populist parties may come into power in Europe and -2
threaten the stability of the EU. -4
-6
Owing to a more competitive industrial sector more 2001 2005 2009 2013 2017 2021
generally compared to Europe, and the rapid rise in Source : Oxford Economics/Haver Analytics

unconventional oil & gas, North American consumption


has fared better than that in Europe, although the pump
market was hit in 2015-2016 by the downturn in oil
production and investment. We expect the North American
World Output: Food & beverages, pulp & paper
market to grow 0.9% this year to reach US$20bn, with
% year and pharmaceuticals
US$14bn accounted for by the US. Firm growth over the 12 Forecast
Pulp & paper
medium term means this market will reach around 10 Food & beverages
Pharmaceuticals
US$23bn by 2021, with the US accounting for around 8
US$16bn of the total. The main source of risk to this 6
region, both upside and downside, is the direction of 4

President Trump’s policies as there is much uncertainty 2

regarding the precise policies that will be implemented. 0


-2
The weakest growth this year, on a regional basis is -4
expected to be in South America, the only region where -6

2001 2005 2009 2013 2017 2021


the market is expected to contract. Consumption is
Source : Oxford Economics/Haver Analytics
expected to fall by 6.3%, on the back of widespread
declines, with political turmoil and economic crisis in Brazil
the main culprit. Meanwhile in Middle East & Africa,
consumption is also expected to fall by 1.7% to US$7.4bn
this year before returning to growth from 2019.
Page 3
Spring
2017 Overview

World: Pump consumption breakdown (2016) World: Centrifugal pump consumption


US$mn Consumption (LHS) % year
Pump parts

45000 Growth rate (RHS) 30


29.1% Forecast
40000 25
Other complete
pumps 35000 20
12.8%
30000
15
25000
10
Centrifugal 20000
Rotary pumps 5
pumps 15000
13.5%
34.7% 0
10000
-5
5000
Reciprocating -10
pumps 0

9.9% 2001 2004 2007 2010 2013 2016 2019


Source : Oxford Economics Source : Oxford Economics/Haver Analytics

World: Reciprocating pump consumption World: Rotary pump consumption

US$mn Consumption (LHS) % year US$mn Consumption (LHS) % year

18000 Growth rate (RHS) 40 18000 Growth rate (RHS) 50


Forecast Forecast
16000 16000
30 40
14000 14000
30
12000 20 12000
10000 10000 20
10
8000 8000 10
6000 0 6000
0
4000 4000
-10 -10
2000 2000
0 -20 0 -20

2001 2004 2007 2010 2013 2016 2019 2001 2004 2007 2010 2013 2016 2019
Source : Oxford Economics/Haver Analytics Source : Oxford Economics/Haver Analytics

World: Other complete pump consumption World: Pump part consumption

US$mn Consumption (LHS) % year US$mn Consumption (LHS) % year

14000 Growth rate (RHS) 25 40000 Growth rate (RHS) 40


Forecast Forecast

12000 20 35000
30
15 30000
10000
20
10 25000
8000
5 20000 10
6000
0 15000
0
4000 -5 10000

2000 -10 5000 -10

0 -15 0 -20
2001 2004 2007 2010 2013 2016 2019 2001 2004 2007 2010 2013 2016 2019

Source : Oxford Economics/Haver Analytics Source : Oxford Economics/Haver Analytics

Page 4
Spring
2017 Overview

Table: Pump market forecasts across global regions and key


large national markets (US$mn through 2021)

Table: Pump market forecasts across global regions and key


large national markets (annual growth rates through 2021)
Page 4
Spring
2017 Pharmaceuticals

Pharmaceuticals
World: Pharmaceuticals*
Pharma outlook remains mixed US$, billions Real value added output (LHS) % year
700
The pharmaceutical sector is generally detached from the Growth rate (RHS) 12
Forecast
economic cycle for a number of reasons related to its cost 600

structure and key markets. However, this means that it is 10


500

8
generally a source of stable demand growth for pump
400
producers who supply highly specialised products to the 6
pharmaceutical industry. 300
4
200
In the developed world, we have seen a mixed
100 2
performance so far this year, but the slowdown since H2
2016 means that we only expect output to rise by 0.5% in 0 0

2001 2005 2009 2013 2017 2021


2017. Furthermore, the risks to the forecast have remain *World refers to the 67 countries

Source : Oxford Economics/Haver Analytics included in the OE industry service


considerable. In the US, although the American Health
Care Act (AHCA), the replacement of Obamacare, was
passed by the house of representatives, it needs to pass
the Senate and prospects are dicey. Furthermore, a recent
report by the Congressional Budget Office (CBO) More developed regions: 65+ as a share of total

highlighted that the number of uninsured would rise % population Forecast


25
substantially, reducing demand for pharmaceuticals. In any
case, the industry will be under pressure as the 20
government focuses on cutting healthcare costs. Indeed,
this is also affecting prospects in other developed 15
countries. However, an ageing population will create
demand for higher value-added specialty drugs. 10

In emerging economies, a rising middle class is a key 5


theme and this will mean that per-capita usage of
pharmaceuticals should rise. In addition, governments in a 0

number of emerging markets are looking at developing 1990 2000 2010 2020 2030
Source : Haver Analytics/UN Population
their healthcare systems in order to increase the
accessibility of healthcare, which, in turn, will raise
demand for pharmaceuticals. However, progress has GDP per head purchasing power parity
stumbled in some economies where economic growth has Thousands
Forecast
50
slowed. At the same time, emerging markets generally
45
rank poorly with regard to patent protection and this will
40

make some pharmaceutical firms nervous about 35 Advanced Economies


developing drugs in EMs. Furthermore, production 30
Emerging Markets

standards in emerging markets, like China and India, have 25


been heavily scrutinised recently and this could dampen 20
the pace of pharmaceutical growth ahead, if left 15
unchecked. Beyond the near term, India and Indonesia 10

have the strongest growth prospects among the emerging 5


0
markets.
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Source : Oxford Economics/Haver Analytics
Overall, we expect global pharmaceuticals output to rise
by 2.8% and 4.2% in 2017 and 2018, respectively.
Page 27
Spring
2017 Pharmaceuticals

Table: Forecasts of economic activity in the pharmaceuticals


sector across global regions (annual growth rates through
2021)

Table: Pump consumption in the pharmaceuticals end


market in 2016, top 20 countries
Page 28
Spring
2017 North America
Canada
Pump market to recover with the economy
Canadian pump consumption has struggled to maintain the Canada: Investment and industrial production
% year Forecast
high level seen in 2010 in recent years. In 2010, the 30 GDP Weighted IP
Canadian pump market reached an all-time high of 25
$7,361m, growing 34% on the year before. Since then the 20
market has steadily shrunk, to an estimated $4,341m in 15
10
2016. Looking at subsectors, the years most responsible for
5
this large shrinking are 2013 and 2015, both of which 0
coincide with struggling weighted end-use output – in 2013 it -5
grew just 0.4%, while in 2015 it fell by 20.7%. Pump -10
consumption therefore moves with end-use sector prospects -15
-20
which are expected to grow steadily moving into the forecast
-25
period. 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021
Source : Oxford Economics/Haver Analytics
The Canadian economy was very weak in 2015 and 2016
primarily due to weakness in the global oil market. With the
oil market plunging to below $50 per barrel during 2015 from
over $100 per barrel in 2014, Canada’s economy has Canada: Pump consumption

struggled over the past few years given its dependence on US$mn Consumption (LHS) % year

7000 Growth rate (RHS) 50


Forecast
its oil industry. With the oil price now having recovered from
6000 40
the lows of early 2016 and the Canadian oil sector following
30
suit, we are expecting a turnaround in the economy more 5000
generally also. Therefore, key drivers of the pump market, 20
4000
such as GDP and fixed investment are expected to improve 10
3000
in 2017 onwards. In particular, fixed investment which fell by 0
4.6% in 2015 and 3.2% in 2016, is expected to finally 2000
-10
resume growth at 1.5% in 2017 and steadily improve over 1000 -20
the following years. This should lead to improved prospects
0 -30

for pump end-users and thereby pump consumption. 2001 2004 2007 2010 2013 2016 2019
Source : Oxford Economics/Haver Analytics
The improving economic outlook and prospects for the oil
sector should lead to improving end-use sector demand. We
expect our index of end-use demand to grow by an average
of 3.3% over the forecast period, compared to falls Canada: Centrifugal pump consumption

averaging 11.1% over the past three years. The extraction US$mn Consumption (LHS) % year

1200 Growth rate (RHS) 50


Forecast
sector is a big part of this, which fell 3.5% and 4% in 2015
and 2016, but is expected to grow 1% this year and improve 1000 40

steadily after that. As a result, the pump market looks set for 30
800
steady, though not spectacular growth. We expect pump
20
consumption to grow by 3.2% in 2017, compared to an 600
10
estimated fall of 7.7% in 2016. We then expect the market to
400
grow to $5,486m in 2021, from just $4,341m in 2016 – an 0
increase of 35%. The “other” pump category contains the 200 -10
best prospects for growth, with year-on-year growth
0 -20

expected to reach 8.1% in 2021. Centrifugal pumps are 2001 2004 2007 2010 2013 2016 2019
expected to be the weakest. Source : Oxford Economics/Haver Analytics

Page 35
Spring
2017 North America

Canada: Reciprocating pump consumption Canada: Rotary pump consumption


US$mn Consumption (LHS) % year US$mn Consumption (LHS) % year

2000 Growth rate (RHS) 80 1400 Growth rate (RHS) 60


Forecast Forecast
1800 50
60 1200
1600 40
1400 40 1000
30
1200 20 800 20
1000
0 600 10
800
0
600 -20 400
400 -10
-40 200
200 -20
0 -60 0 -30

2001 2004 2007 2010 2013 2016 2019 2001 2004 2007 2010 2013 2016 2019
Source : Oxford Economics/Haver Analytics Source : Oxford Economics/Haver Analytics

Canada: Other complete pump consumption Canada: Pump part consumption


US$mn Consumption (LHS) % year US$mn Consumption (LHS) % year

600 Growth rate (RHS) 60 2500 Growth rate (RHS) 40


Forecast Forecast
50
500 30
40 2000
20
400 30
1500
20 10
300
10 0
1000
200 0
-10
-10 500
100 -20
-20
0 -30 0 -30

2001 2004 2007 2010 2013 2016 2019 2001 2004 2007 2010 2013 2016 2019
Source : Oxford Economics/Haver Analytics Source : Oxford Economics/Haver Analytics

Canada Pump consumption


US$mn (annual % change)
2016 2017 2018 2019 2020 2021
Centrifugal pumps 639.1 647.8 663.4 683.4 710.7 746.8
annual % change -8.3 1.4 2.4 3.0 4.0 5.1
Reciprocating pumps 661.5 689.9 722.2 761.8 810.1 868.0
annual % change -7.2 4.3 4.7 5.5 6.3 7.1
Rotary pumps 655.3 712.9 772.0 834.7 902.1 972.6
annual % change 1.2 8.8 8.3 8.1 8.1 7.8
Other complete pumps 260.3 263.5 276.2 294.4 315.3 337.4
annual % change -7.8 1.2 4.8 6.6 7.1 7.0
Pump parts 1321.8 1449.2 1537.4 1608.3 1699.6 1803.5
annual % change -1.7 9.6 6.1 4.6 5.7 6.1
Total 3538.0 3763.2 3971.3 4182.6 4437.8 4728.2
Page 36 -4.0 6.4 5.5 5.3 6.1 6.5
Spring
2017 North America
annual % change

Page 70
Spring
2017 Economic Background | Canada

Canada
Real GDP grew 3.7% annualized in Q1, global uncertainties will keep the Bank of
marking a very upbeat start to 2017 for Canada on the sidelines until early next year.
Canada’s economy. The headline gain was
The economy continues to generate robust
broad-based, with the exception of net
employment growth, with the 12-month moving
exports (which were a drag on growth). The
average in May at its strongest since early
economy appears to be picking up
2013. Upbeat job creation will support income
momentum, but we think the headline Q1
growth and in turn consumer spending, even as
growth number overstates the true pace of
wage growth remains weak. Meanwhile, oil
underlying economic activity. Going
prices continue to trade in the US$40-50 per
forward, we expect that rising activity in
barrel range, highlighting that energy sector
both energy and non-energy sectors, as well
activity isn’t likely to contribute as robustly to
as supportive monetary and fiscal policy,
GDP growth as it did in the days before oil
will underpin a more moderate-paced
prices collapsed.
expansion and forecast that GDP growth will
average 2.5% in 2017 as a whole.
A recent speech from Senior Deputy Governor
Carolyn Wilkins signals the Bank of Canada is
growing more confident about the economic
outlook. However, rather than signalling an
imminent tightening of monetary policy, we think
the Bank of Canada is trying to telegraph that it
is very unlikely – barring an unexpected shock –
to lower the overnight rate below the current
level of 0.5%. We expect the next move from
the Bank of Canada will be a 25 basis point rate
hike in Q1 2018. In our view, weak inflationary
pressures and considerable domestic and

Forecast for Canada


(Annual percentage changes unless specified)
2016 2017 2018 2019 2020 2021
Domestic Demand 1.0 1.9 1.6 1.6 1.7 1.7
Private Consumption 2.3 2.9 1.7 1.6 1.6 1.7
Fixed Investment -3.1 1.6 1.7 1.9 2.0 1.9
Stockbuilding (% of GDP) 0.0 0.3 0.1 0.1 0.1 0.1
Government Consumption 2.0 1.3 1.6 1.5 1.5 1.5
Exports of Goods and Services 1.0 1.3 3.5 3.5 3.4 3.1
Imports of Goods and Services -0.9 2.0 2.0 2.6 3.0 3.1
GDP 1.5 2.5 2.0 1.9 1.8 1.7
Industrial Production -0.3 4.2 1.3 1.2 1.0 0.8
Consumer Prices 1.4 1.9 1.9 1.8 1.9 2.0
Current Balance (% of GDP) -3.3 -2.7 -2.6 -2.4 -2.2 -2.2
Government Budget (% of GDP) -0.6 -1.4 -1.8 -1.6 -1.3 -1.3
Short-Term Interest Rates (%) 0.83 0.84 0.95 1.28 1.59 1.87
Long-Term Interest Rates (%) 1.25 1.57 1.92 2.21 2.43 2.66
Exchange Rate (Per US$) 1.33 1.33 1.32 1.30 1.28 1.27
Exchange Rate (Yen per Can $) 82.0 84.2 88.2 91.4 92.5 93.2

Page 69
Spring
2017 Economic Background | Canada
Forecast Overview Canada: Non-fuel exports and world trade
% year
Fairly sluggish export performance 25 W orld trade
20 F'cast
The performance of non-energy exports over the last year
15
has been disappointing considering the benefit of a more
10
competitive Canadian dollar. It probably reflects – at least
5
some of the time – sluggish external demand. However, the 0
external background has started to improve and we do -5
Non-fuel export
expect overall export volume growth to edge up slightly to -10 volumes
1.3% in 2017 from 1% last year. Imports meanwhile are -15
projected to grow by 2.0% in 2017, reflecting gradually -20
strengthening domestic demand – though a still weak C$ will -25
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020
continue to act as a check on imports.
Source: Oxford Economics

Adjustment to low oil prices largely complete


Business investment grew 10.3% in Q1, driven largely by a
rise in machinery and equipment spending (+25.3%). This
stands in sharp contrast to the recent past as business Canada: Consumption and Investment
investment declined in 2015 and 2016 as low global oil % year
15
prices undermined the profitability of capital spending in the Investment F'cast
oil and gas sector. However, this drag should fade in 2017 10

as oil prices are expected to rise from their average 2016 5


level and the structural adjustment in the energy sector to
0
lower oil prices looks to be finished. In addition, a more
competitive currency and slowly rising external demand will -5 Consumption
provide a mild boost in the coming quarters. We forecast
-10
total investment will grow by 1.6% this year after falling 4.6%
-15
in 2015 and a further 3.1% in 2016. Overall, we expect that
GDP growth will accelerate from an average 1.5% last year -20
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020
to 2.5% in 2017.
Source: Oxford Economics

Mixed outlook for key drivers


Consumer spending was surprisingly strong in Q1, growing
by 4.3%. However, we do not think that this pace is
sustainable given the mixed outlook for several key drivers: Canada: Monetary policy instruments
%
Improvement in labor market dynamics over the last 7
six months: the 12-month moving average for payroll Long-term F'cast
6 interest rate
growth increased to +26,000 in May; moreover, the Short-term
5 interest rate
number of workers in full-time employment has picked up
4
noticeably this year.
3

Stagnating real earnings: while employment has 2


increased this year, nominal wage growth has remained
1
subdued. And with CPI inflation expected to average Inflation
0
1.9% this year, real wages will struggle to rise.
-1
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020
Interest rate risk: short-term interest rates remain pinned Source: Oxford Economics
down by accommodative Bank of Canada monetary

Page 70
Spring
2017 Economic Background | Canada
policy, which is unlikely to shift in 2017. However, long-
Canada: Exchange rate per US$
term interest rates have risen on a mix of domestic and 0.9
foreign factors, posing some modest risks to the outlook. F'cast
1.0

Over the medium term, growth will be influenced by: 1.1

1.2
Persistent drag from high household debt: over-
1.3
indebtedness will remain a concern. We expect
1.4
household debt to start falling only in the medium term.
Even then, it will stay well above the level of many other 1.5
developed economies – the eventual deleveraging 1.6
process will be protracted and serve as a drag on
1.7
consumer spending. 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020
Source: Oxford Economics

Housing sector checked, but not crushed: although


housing starts were relatively strong in 2016 and Q1
2017, supported in part by Bank of Canada policy easing,
we expect them to lose momentum during the rest of
2017 as reduced expectations for home price inflation US and Canada: GDP
weigh on builder activity. % year
6
US F'cast
Improving external backdrop: while uncertainty 4 Canada
surrounding the policies of the Trump administration will
weigh on the outlook, US domestic demand should 2

strengthen in 2017. As such, world trade weighted by


0
Canadian export shares is expected to grow by about
4.5% in 2017, up from 0.7% in 2016. -2

-4
Key-long term advantages
-6
Energy sector opportunities: Canada will benefit from 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020
rising shale gas and oil output in the longer term. Source: Oxford Economics
However, a vast outstripping of global supply trends
relative to demand will lead to less vigorous activity in
Canada’s energy sector in the short term.

Healthy government finances: the budget deficit is small Canada: Government balance and debt
relative to most developed countries, at around 1% of % of GDP % of GDP
4 140
GDP. The Trudeau government will ramp up spending to F'cast
stimulate the economy but government debt as a 3 120
Government

percentage of GDP should still fall over time. 2 debt (RHS) 100

1 80
Growing labor supply: although slowing, the working
age population is expected to grow at a faster rate than in 0 60
Government
most other advanced economies, supporting long-term balance (LHS)
-1 40
potential growth. -2 20

-3 0
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020
Source: Oxford Economics

Page 71
Spring
2017 Glossary
Definition of market size

We define the national market size (also referred to as “apparent consumption” or simply “consumption”) as:

Market size = domestic production – exports + imports.

Figures are expressed in nominal terms (ie not adjusted for inflation), and are converted to US dollars at current-year
exchange rates. Therefore, movements in currencies against the US dollar will have an impact on market size.

Definition of pump types


Our core dataset for pumps uses the Harmonised System (HS) of trade classification, since it is the only classification
system that is consistent across all countries covered in the report. The data cover pumps of all sizes and
applications (including for both industrial and household use). Unfortunately, the World Customs Organisation, which
administers the HS definitions, offers no more detail on the nomenclature definitions than the names shown in the
table below:

HS Code Title Category ID


8413 Pumps for liquids, liquid elevators, parts thereof Total P
841311 Pumps for Dispensing Fuel or Lubricants Reciprocating P_Rec
841319 Other Pumps for Liquids, With a Measuring Device Reciprocating P_Rec
841320 Hand Pumps for Liquids Reciprocating P_Rec
841330 Fuel, Lubricating or Cooling Medium Pumps Rotary P_Rot
841340 Concrete Pumps Other P_Oth
841350 Other Reciprocating Positive Displacement Pumps Reciprocating P_Rec
841360 Other Positive Rotary Displacement Pumps Rotary P_Rot
841370 Other Centrifugal Pumps Centrifugal P_Cen
841381 Other Pumps for Liquids Other P_Oth
841382 Liquid Elevators Other P_Oth
841391 Parts of Pumps for Liquids Parts P_Par
841392 Parts of Liquid Elevators Parts P_Par

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Definition of end-use markets

We use the NACE revision 2 classification system for our end use sector analysis (which is identical to the ISIC
revision 4 and very close to the North American NAICS classification at this level of aggregation). Our data is sourced
from GDP by sector data and industrial production data sources from national statistical agencies. More detail on our
end-use sector data methodology is available on request.

NACE code Name Description Notes


1 to 3 Agriculture Exploitation of vegetable and animal natural resources, comprising the
activities of growing of crops, raising and breeding of animals, harvesting
of timber and other plants, animals or animal products from a farm or their
natural habitats.
24 Basic metals Activities of smelting and/or refining ferrous and non-ferrous metals from
ore, pig or scrap, using electrometallurgic and other process metallurgic
techniques. Also includes the manufacture of metal alloys and super-alloys
by introducing other chemical elements to pure metals.
20 Chemicals Transformation of organic and inorganic raw materials by a chemical Broken down into basic
process and the formation of products. It distinguishes the production of chemicals and other chemicals
basic chemicals that constitute the first industry group from the production
of intermediate and end products produced by further processing of basic
chemicals that make up the remaining industry classes.
41 to 43 Construction General and specialised construction activities for buildings and civil Broken down into residential,
engineering works. It includes new work, repair, additions and alterations, commercial/industrial and
the erection of prefabricated buildings or structures on the site and also infrastructure
construction of a temporary nature. It includes dwellings, office buildings,
stores and other public and utility buildings, farm buildings etc., as well as
civil engineering works such as motorways, streets, bridges, tunnels,
railways, airfields, harbours and other water projects, irrigation systems,
sewerage systems, industrial facilities, pipelines and electric lines, sports
facilities etc
10 to 11 Food & Includes the processing of the products of agriculture, forestry and fishing
Beverage into food for humans or animals, and includes the production of various
intermediate products that are not directly food and beverage products.
Beverages include both alcoholic and non-alcoholic drinks.

28 Mechanical includes the manufacture of machinery and equipment that act


engineering independently on materials either mechanically or thermally or perform
operations on materials (such as handling, spraying, weighing or packing),
including their mechanical components that produce and apply force, and
any specially manufactured primary parts.

5 and 7 Mining Includes the extraction of coal, other solid mineral fuels and metallic ores
through underground, seabed or open-cast mining, as well as activities
such as crushing, grinding, washing, or compressing leading to a
marketable product
6 and 19 Oil & gas Includes the production of crude petroleum, the mining and extraction of oil Broken down into extraction
from oil shale and oil sands and the production of natural gas and recovery and refining
of hydrocarbon liquids. This division includes the activities of operating
and/or developing oil and gas field properties. It also includes the
manufacture of liquid or gaseous fuels or other products from crude
petroleum, bituminous minerals or their fractionation products. Petroleum
refining involves one or more of the following activities: fractionation;
straight distillation of crude oil; and cracking.
17 Pulp & paper This sector comprises (1) manufacture of pulp, involving separating the
cellulose fibres from other matter in wood; (2) manufacture of raw paper,
involving releasing pulp onto a moving wire mesh so as to form a
continuous sheet; (3) conversion of paper into end-use products such as
cardboard, sanitary paper, stationery, wallpaper, etc.
21 Pharmaceuticals Includes the manufacture of basic pharmaceutical products and
pharmaceutical preparations, as well as the manufacture of medicinal
chemical and botanical products
35 to 39 Utilities Includes (1) the the activity of providing electric power, natural gas, steam, Broken down into power
hot water and the like through a permanent infrastructure (network) of lines, generation and water/sewerage
mains and pipes; (2) the collection, treatment and distribution of water for
domestic and industrial needs; and (3) operation of sewer systems or
sewage treatment facilities that collect, treat, and dispose of sewage.

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Detailed description of data methodology and assumptions


The purpose of this appendix is to enable a broad, high-level understanding of the data construction process, through
providing a high-level description of methodology as well as illustrative examples of the different approaches used to
construct data in selected representative countries. As a result, this appendix provides a roadmap to a general
understanding of the data. However, it should not be taken as a comprehensive guide. Further information or
questions on the assumptions used as part of this work are collated in an assumptions log, which is available on
request from Oxford Economics.
This appendix is split into two sections:
1. Broad methodological approach;
2. Detailed examples of data construction for selected countries.

Broad methodological approach


We measure market size (technically referred to as “apparent consumption”) as

Apparent consumption = production – exports + imports.


Our methodology and sourcing is split into that used for the trade components of apparent consumption (exports and
imports), and that used to construct national production data.

Trade components (exports, imports)

For all countries, trade data is sourced from the UN trade database (“Comtrade”). This database records customs
data of the value of goods traded between countries. The classification system used for Comtrade is the UN’s
Harmonized System (HS) classification. The classification used for this work, discussed with associations and large
market players, is as follows (note we anticipate that this classification could be amended over time based on
feedback from the industry):

HS Code Title Category ID


8413 Pumps for liquids, liquid elevators, parts thereof Total P
841311 Pumps for Dispensing Fuel or Lubricants Reciprocating P_Rec
841319 Other Pumps for Liquids, With a Measuring Device Reciprocating P_Rec
841320 Hand Pumps for Liquids Reciprocating P_Rec
841330 Fuel, Lubricating or Cooling Medium Pumps Rotary P_Rot
841340 Concrete Pumps Other P_Oth
841350 Other Reciprocating Positive Displacement Pumps Reciprocating P_Rec
841360 Other Positive Rotary Displacement Pumps Rotary P_Rot
841370 Other Centrifugal Pumps Centrifugal P_Cen
841381 Other Pumps for Liquids Other P_Oth
841382 Liquid Elevators Other P_Oth
841391 Parts of Pumps for Liquids Parts P_Par
841392 Parts of Liquid Elevators Parts P_Par
In the below, we will refer to the Comtrade data as our “lead” data source since it is the only source of data
comprehensive enough to include all countries covered in this report. As a result, the limitations of the Comtrade
classification take priority over more granular data sources that might be available in specific countries when
determining mappings.

Production

There is no single source of production data for the countries covered in this report as there is for trade data.
Therefore, different approaches are used for different countries depending on their available data sources. It is

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possible to classify countries into groups which indicate the general methodology used to construct their production
data:
1. European countries;
2. Non-European countries with domestic production that have granular production data;
3. Non-European countries with domestic production that do not have granular production data;
4. Countries whose domestic production is marginal or zero.

European countries:

Eurostat collects detailed production information for very granular industrial sectors for European countries; its
database is called Prodcom. This information is itself collected from national statistical bodies, who implement survey
methods to determine the size and value of production in different industrial sectors. The mapping used is detailed
below and aligns closely with the mapping used for Comtrade (indeed the classification has been designed to accord
with the Comtrade HS classification system since this is our “lead” data source since it covers all countries globally):

Co d e Title C at 1 ID 1
28 1213 20 H ydra ul i c pumps (pi s ton) R e c iproc a ti ng P_ R e c

28 1213 50 H ydra ul i c pumps (g e a r) R ota ry P_ Rot

28 1213 80 H ydra ul i c pumps (va ne )


R ota ry P_ Rot
28 1215 30 R e c iproc a ti ng pos i ti ve di s pl a c e me nt hydra uli c units , w ith pumps
R e c iproc a ti ng P_ R e c
28 1215 80 R ota ry pos i ti ve dis pl a c e me nt hydra ul ic uni ts , w i th pumps
R ota ry P_R ot
Pumps fi tte d or de s ig ne d to be fitte d w i th a me a s uri ng de vi c e , for dis pe ns i ng fue l or l ubric a nts , of the
28 1311 05
type us e d i n fil l ing s ta ti ons or i n g a ra g e s R e c iproc a ti ng P_ R e c
Pumps fi tte d or de s ig ne d to be fitte d w i th a me a s uri ng de vi c e , for dis pe ns i ng l iquids (e x c l.pumps for
28 1311 25
di s pe ns i ng fue l or lubri c a nts , of the type us e d in fi l li ng s ta tions or in g a ra g e s )
R e c iproc a ti ng P_ R e c
28 1311 45 Pos i ti ve di s pl a c e me nt pumps , ha nd pumps
R e c iproc a ti ng P_ R e c
28 1311 65 Fue l , l ubri c a ti ng or c ool ing ‐me dium pumps for i nte rna l c ombus ti on e ng i ne s
R ota ry P_ Rot
28 1311 85 C onc re te pumps
R e c iproc a ti ng P_ R e c
28 1312 20 Pos i ti ve di s pl a c e me nt re c i proc a ting pumps , dos i ng a nd proporti oni ng
R e c iproc a ti ng P_ R e c
28 1312 50 In‐line re c iproc a ting pi s ton pumps
R e c iproc a ti ng P_ R e c
28 1312 80 Pos i ti ve di s pl a c e me nt re c i proc a ting pumps , di a phra g m

28 1313 20 Pos i ti ve di s pl a c e me nt pumps , rota ry, g e a r R e c iproc a ti ng P_ R e c

28 1313 40 Pos i ti ve di s pl a c e me nt pumps , rota ry, va ne R ota ry P_ R ot

28 1313 60 Pos i ti ve di s pl a c e me nt pumps , rota ry, s c re w R ota ry P_ R ot


Pos i ti ve di s pl a c e me nt pumps , rota ry (i nc luding pe ri s ta l ti c , rota ry l obe a nd he l ic a l rotor pumps )
28 1313 80 R ota ry P_ R ot
(e x c ludi ng hydra uli c units , g e a r pumps , va ne pumps , s c re w pumps )

28 1314 13 Subme rs i bl e motor, s i ng l e ‐s ta g e rotodyna mi c dra ina g e a nd s e w a g e pumps R ota ry P_ Rot

28 1314 15 Subme rs i bl e motor, mul ti‐s ta g e rotodyna mi c pumps C e ntrifug a l P_ C e n

28 1314 17 G la ndl e s s impe ll e r pumps for he a ti ng s ys te ms a nd w a rm w a te r s upply


C e ntrifug a l P_ C e n
28 1314 20 R otodyna mi c pumps ? 1 5 mm dis c ha rg e
C e ntrifug a l P_ C e n
C e ntri fug a l pumps w i th a di s c ha rg e outl e t dia me te r > 1 5 mm, c ha nne l i mpe l le r pumps , s ide c ha nne l
28 1314 30
pumps , pe ri phe ra l pumps a nd re g e ne ra ti ve pumps C e ntrifug a l P_ C e n
C e ntri fug a l pumps w i th a di s c ha rg e outl e t dia me te r > 1 5 mm, s ingle ‐s ta g e w i th a s ingle e ntry
28 1314 51
i mpe l le r, c los e c oupl e d C e ntrifug a l P_ C e n
C e ntri fug a l pumps w i th a di s c ha rg e outl e t dia me te r > 1 5 mm, s ing le s ta g e w ith a s i ng l e entry
28 1314 53
i mpe l le r, l ong c oupl e d C e ntrifug a l P_ C e n
28 1314 55 C e ntri fug a l pumps w i th a di s c ha rg e outl e t dia me te r > 1 5 mm, s ing le ‐s ta g e wi th doubl e entry i mpe l ler
C e ntrifug a l P_ C e n
28 1314 60 C e ntri fug a l pumps w i th a di s c ha rg e outl e t dia me te r > 1 5 mm, mul ti ‐s ta g e (i nc l udi ng s e lf‐pri mi ng )
C e ntrifug a l P_C en
28 1314 71 R otodyna mi c s i ng le ‐s ta g e mi x e d flow or a x i a l pumps
C e ntrifug a l P_ C e n
28 1314 75 R otodyna mic multi‐s ta g e mixe d flow or a x ia l pumps
C e ntrifug a l P_ C e n

C e ntrifug a l P_ C en

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One key assumption relates to data omitted by Prodcom to protect company confidentiality. This typically arises in
smaller countries where there are few enough producers such that statistics could reveal private financial information
about individual companies. In such cases, we do the following to fill in the data gaps:
Calculate the share of the product category in question in prior years as a percentage of overall EU
production.
Apply this percentage to the overall level of EU production in the year with missing data to calculate an
estimate of the country’s production for that year.

Non-European countries with domestic production that have granular production data

Outside of Europe, seven countries have country specific data sources with data for pump production (United States,
Japan, Canada, South Korea, Argentina, Australia and Brazil). For these countries, we use this data, along with
country-specific assumptions on the mapping of their pump categories (which are typically not classified according to
HS) to the HS classification used by Comtrade, our lead data source.

Non-European countries with domestic production that do not have granular production data

For most non-European producers, national statistical bodies do not collect production information granular enough to
calculate the size on the pump market. As a result, for these countries we source the data on more aggregated
sectors directly from the statistical bodies and then assume that export patterns are an acceptable proxy for domestic
production patterns. Specifically, for each of the pump product types, we do the following:
Calculate pumps’ share of total exports in the more aggregated “General purpose machinery” sector of which
pumps are a part (NACE 28.1, parts of NAICS 332 and 333).

Apply this export share to our estimates of production in the “General purpose machinery” sector to derive an
estimate of the value of pump production.

Countries whose domestic production is marginal or zero

For these countries, we simply assume that exports equal production since these countries provide a negligible
contribution to the overall global pump market. Thus, apparent consumption reduces to imports.

Detailed examples
Here we provide one indicative example for each of the four production categories above to illustrate the methods
and assumptions used to construct the data. We interchange between using 2015 and 2010 to illustrate the data. If
readers require more detail on assumptions, we maintain a supplementary assumptions log that we would be happy
to share with interested readers upon request.

European country with domestic production (example: United Kingdom)

As already noted, the UK import and export data come from Comtrade. This shows that UK pump exports in 2015
were $2,305mn (incl. parts) and imports were $2,107mn (incl. parts).

Production data comes from Eurostat’s Prodcom database. The raw value for 2015 for total pumps (incl. parts) was
$1,858mn. However, this figure implies that exports are greater than the overall value of production which cannot be
the case since production must equal exports plus UK pumps consumed domestically.1

1
Possible exceptions would be trans-shipment hubs (such as the Netherlands), where re-exports could be a factor, but re-exports from the UK are
negligible

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There are two main reasons why this might be the case:
Robustness of survey-based data. Data collected via surveys (such as Prodcom) may miss producers or suffer
from non-response and hence are less reliable than administrative data that collects information on all producers.
Import and export data is more comprehensive in this sense since it measures the actual recorded value of goods
that pass through customs, rather than surveys of companies on their exports.
Differences in mapping. It could be the case that the mapping of Prodcom codes is different from the mapping
of Comtrade codes, as these use different industrial classification systems. However, Prodcom also provides
trade data which we can compare to the Comtrade data to test if our mapping is the same – if the Prodcom trade
numbers match the Comtrade numbers then our mapping must be equivalent. Running this comparison, we
found an almost perfect equivalence between Comtrade and Prodcom trade data. Therefore, this discrepancy
cannot be the result of mapping differences.

To account for such discrepancies, we adjust the Prodcom data, using the “export proxy” assumption regarding
production:

Calculate pumps’ share of total exports in the more aggregated “General purpose machinery” sector of which
pumps are a part (NACE 28.1, parts of NAICS 332 and 333).

Apply this export share to our estimates of production in the “General purpose machinery” sector to derive an
estimate of the value of pump production.

This results in an estimate of $2,453mn including parts.

This gives our overall estimate for 2015 UK pumps including parts: $2,453mn - $2,305mn + $2,107mn = $2,556mn.2
Non-European producers with additional data (example: United States)

According to Comtrade data, in 2010 the US had exports equal to $6,918mn (incl. parts) for the total pump market.
For 2010 imports, Comtrade records value for the US of $7,124mn, again including parts.
The United States has additional information available on pump production from its Annual Survey of Manufactures
(ASM) and the ASM’s predecessor survey for US manufacturing (ma333 for pumps). These surveys provide granular
information on pump production across subsegments as defined in the NAICS classification system. The ASM has
very different categories compared to the HS classification from Comtrade (our lead data source). Since there is no
complete correspondence table we need to make many different assumptions. We have used the following methods
to verify that the decisions we have made about mappings are valid:
The ASM also has some trade data for some of the product categories. This allows us to check the ASM
trade data against our Comtrade data. If they line up, this suggests that mappings are correct.
From our Comtrade data, we can compute exports in the subsectors as a share of the total pump market. We
would expect to see similar, though not necessarily the same, shares in the Comtrade data as in the ASM
data.
We know that the overall export level for each pump subcategory must be less than the production value for
each pump subsector. Thus, if a mapping yields several subcategories with exports greater than production,
we know there is an issue with the mapping.
There are some imperfect, though useful, correspondence tables available that we have used to inform our
mapping choices.

Even with these checks allowing us to make judgements about whether our mapping is correct or not, it is impossible
to know whether the mapping is exact, since surveys differ in the ways they ask for information which may imply that
they under or overestimate the data relative to the Comtrade data. Where possible, we are happy to work with the
associations and industry to improve the mapping if sensible – though it is important to note that 100% accuracy in
the mapping may not be possible.
2
It is interesting to note that EIF’s estimate for the UK pump market in 2015 (which should be production – exports + imports) is $803mn (or about
$1bn including parts). But we know from Comtrade that imports alone were $2.1bn. So if the EIF estimate of the UK market is correct, it implies
that the difference between production and exports must equal $-1.1bn. In other words, the UK must export $1.1bn more pumps than it produces!

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Our data construction method can be split into two parts based on the survey used: for 2008 and earlier we use the
predecessor to the ASM, which has very granular data. For post 2008 we use the ASM. This has detailed data, which
requires a different approach to 2008 and earlier.

2008 and earlier


Based on the methods described in the bullets above, the mapping is shown in the table below (note this is for the
pre-2008 US surveys which provided very granular data. After 2008 only an aggregate category is provided for overall
pumps, which we split as described below). “Directly allocated” categories are assigned directly and completely to the
OE codes shown in the table. “Indirectly allocated” codes are more challenging as some or all of them could apply to
some or all the OE categories. Therefore, we assume that the percentage of the sum of these indirectly allocated
categories attributed to each OE category is equal to the shares of the OE categories in the directly allocated
categories – that is, we split the indirectly allocated categories by shares in the directly allocated categories. From this
process, we derive the data for all our pump categories for years 2000-2008.
For 2000-2006 For 2007-2008
US survey description OE code US survey code US survey description OE code

Directly allocated Directly allocated


Centrifugal pumps (except drivers) P_Cen 333911140T Centrifugal pumps, submersible P_Cen
Vertical turbine pumps (except drivers) P_Rot 333911141T Centrifugal pumps, other P_Cen
Reciprocating pumps (except drivers), reported P_Rec 333911149T Turbine pumps, vertical P_Rot
Diaphragm pumps (except drivers), reported P_Rec 33391114C7 Reciprocating pumps P_Rec
Rotary pumps (except drivers), reported P_Rot 33391114D5 Diaphragm pumps P_Rec
Other (except drivers), reported P_Oth1 33391114RT Rotary pumps P_Rot
Other pumps P_Oth2 333911112T Other pumps, including sump pumps, hot water P_Oth
Parts (reported; made by manufacturers of complete pumps) P_Par 3339115 Parts and attachments for pumps and pumping eq P_Par
Indirectly allocated Indirectly allocated
Drivers (reported) Drivers 333911130T Oil-well and oil-field pumps (except boiler feed) Oil
Estimated from other sources (potentially including drivers) Drivers 333911110T Domestic water systems, including windmill and Water
Domestic water systems, including drivers Water
Domestic sump pumps, including drivers Sump
Oil well and oil field pumps Oil

Post-2008

For the years post 2008, we only have an overall category from the Annual Survey of Manufacturers (ASM) called
“Pump equipment” – this is formed from the summation of the “industrial pumps” category, as well as several
additional categories that appear to apply to the overall pumps category. From here, two steps are required to get to
our final data:

1. The overall category contains more items that are not relevant for the pump market and thus need to be
removed – we can see this because we have this overall category for 2000-2008 as well from the ASM,
which we can compare with our actual data for 2000-2008 calculated according to the description above. Our
actual data for 2008 and earlier shows that the data we want is typically around 60-80% of the overall
category. We thus split out the overall category for years post-2008 using an average of this percentage over
several previous years from the 2008 and earlier period.
2. Once we have the overall data value as described in 1, we then need to split this out into the subsectors. To
do this, we first take the data for 2008 constructed above and grow this forward using the Comtrade export
data. We then use this “proxy” data to calculate splits which we apply to the category made in 1 to find the
pump subsectors. The only exception to this process is pump parts, for which the ASM has a direct category
which we use.
The result of this process is a set of production values for each pump subsector, the sum of which is the production
value for the overall pump sector. Finally, in some cases, like the Prodcom data, some subcategories have production
values less than exports. If this is the case, then we assume production equals exports.
In 2010, this overall value for US pump production is $9,424mn including parts. Combining this last value with the
Comtrade trade data leaves us with apparent consumption for the US in 2010 of: $9,424mn – $6,918mn + $7,125mn
= $9,631m.
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Non-European producers without additional data (example: China)

China’s statistical authority produces no information on the overall size of pump production. Furthermore, we have
used a standardised approach to searching for additional data sources, which has not identified further sources of
information for China. Over time we intend to build up more detailed information from the financial information of
Chinese companies – however this approach has limitations: company’s financial reports have patchy data coverage,
often differ from company to company, and are not available for the large number of smaller companies operating in
China. Therefore, this approach of using company financial information to validate or adjust our approach will require
careful assumptions as well as time to build up a database of credible information.
Our current approach is to use simple, transparent assumptions which can be refined over future editions of this
report as more source information is found and utilised. In this case, the assumption is that the share of pumps in
Chinese “general purpose machinery” (excl. “other general purpose machinery”; NACE code 28.1) for production is
the same as that for exports (since we have export data we can rely on from Comtrade). This assumption breaks
down into the following steps:

Take Chinese pumps exports as a share of wider Chinese “general purpose machinery” (NACE code 28.1)
exports.
Apply this share to China’s production of “general purpose machinery” (NACE code 28.1) to derive an estimate of
China’s production of pumps.
Using this transparent approach, gives an estimate for Chinese pump production (2015) of $50,792mn (note this
includes parts, which is 23% of overall pump production). We think this estimate is plausible based on several
comparisons:

Chinese production of “general purpose machinery” (NACE 28.1) was $441,300mn in 2015. Therefore, of this
pumps represents roughly 12%. In addition to pumps, “General purpose machinery” consists of bearings, taps,
valves, compressors, fluid power equipment and industrial motors. It seems eminently plausible that pumps could
account for 12% of this group of products in China.

Chinese pump exports (2015) were $6,561mn according to Comtrade. Therefore, exports are roughly 13% of
overall production. For a country such as China that is investment-intensive, has a large manufacturing sector
and uses a lot of machinery, this certainly seems plausible.

Possible sources of uncertainty for this figure however are (1) differences between NACE categories used for
Chinese production and HS categories used by Comtrade; (2) China exports more pump as a share of total
general purpose manufacturing than its overall production.

Therefore, according to the Comtrade data combined with plausible assumptions, China is a very large market. The
Comtrade data shows that China’s overall exports of pumps are $6,561mn, and its imports are $4,026mn. Along with
the production figure estimated above, the overall size of the Chinese pump market (2015) is $48,257mn. For
comparison, EIF estimated the size of the Chinese market at $8.3bn (or about $10bn including parts) in 2015. But
Comtrade tells us that imports were $4bn. This implies that domestic producers must be manufacturing $6bn worth of
pumps to serve the domestic market – less than the $6.561bn produced for export. We do not think it is plausible that
more than 50% of Chinese pump production is exported.

Non-producers (example: Saudi Arabia)

For “non-producers” (i.e. countries that have negligible exports of pumps), we assume that production is equal to
exports since their domestic production is so small as not to have a strong impact on the global pump market. In the
case of Saudi Arabia this implies:

According to Comtrade data, in 2010 Saudi Arabia’s pump exports were $75mn and pumps imports were
$1,408m.

Production is set to equal exports – thus pump production for 2010 is $75mn.
Therefore, pump apparent consumption in 2010 equals £75mn - $75mn + $1,408mn = $1,408mn.

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