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1 Personal Copy - Not for Distribution The World Pump Market Volume I 10 October 2014 support: vwoodward@eif4cast.com European Industrial Forecasting Ltd 2014

2 Contents - Volume I - Page 1 I INTRODUCTION II GLOBAL ISSUES II 1 World Market Forecasts - This Year and Last Year II 1 Relative Pump Market Size: Industrial and Developing Countries II 3 Impact of Prices and Exchange Rates on Market Size and Growth II 5 Pump Market Summary II 7 Pump Market Size by World Region and End Use (table) II 8 Pump Market Size in General Industry and by Product Type (table) II 9 Cyclical Fluctuations in the Pump Market (charts by world region) II Relative Growth: Industrial and Developing Countries by End Use Industry II 15 World Market for Oil & Gas: Industrial and Developing Countries - chart II 16 World Market for Chemicals: Industrial and Developing Countries - chart II 17 Power Generation and the Impact of Renewable Energy - chart II 18 World Market for Municipal Water/Wastewater: Industrial and Developing Countries - chart II 19 World Market for General Industry: Industrial and Developing Countries - chart II 20 The Market for Complete Pumps & Actuators in 63 Countries II 21 Pump Market in Asia by country II 22 Pump Market in West Europe by country II 23 Pump Market in East Europe by country II 24 Pump Market in Africa & Middle East by country II 25 Pump Market in America by country II 26 Macro-Economics, GDP and Investment II 27 World GDP and Capital Investment (chart), Growth of World Trade in Manufactured Good II 28 Forecast of GDP Growth by Country, annual II 29 GDP Growth by Country in West Europe (table) II 30 GDP Growth by Country in East Europe (table) II 31 GDP Growth by Country in Africa & Middle East (table) II 32 GDP Growth by Country in Asia (table) II 33 GDP Growth by Country in America (table) II 34

3 Contents - Volume I - Page 2 Forecasts for the Growth of Capital Investment in 63 countries II 35 Capital Investment in West Europe by country II 36 Capital Investment in East Europe by country II 37 Capital Investment in Middle East/Africa by country II 39 Capital Investment in Asia Pacific by country II 39 Capital Investment in America by country II 40 Pump Markets in the World's Largest Countries II 41 Key Issues (table) II 41 West Europe (text, chart) II 42 United States (text, chart) II 43 Russia (text, chart) II 44 China (text, chart) II 45 India (text, chart) II 46 Focus on the Pump Market in Japan II 47 Background II 47 Japanese Pump production II Macro-economic prospects for Japan II 49 The Japanese market by end use industry II 49 Complete pump market trends for Japan (chart) II 50 Japanese orders for machinery II Brazil (text, chart) II Pump Export Summary (text, table) II 54 China as a Supplier II 55 Imports of Complete Pumps by 63 countries, ranked by China's share in 2013 (table) II 56 Imports of Pump Parts by 63 countries, ranked by China's share in 2013 (table) II 57 Uncertainties Surrounding the Forecasts II 58 The World Pump Market and the Top 25 Pump Companies (text, table) II 61

4 Contents - Volume I - Page 3 III THE PUMP MARKET BY PRODUCT TYPE Introduction III 1 Summary of the World Pump Market by World Region and Product Type III 2 The World Market for Complete Pumps by Product Type (chart) III 3 The Market for Pump Parts III 4 Imports of Pump Parts - Rankings by 63 Countries (table) III 5 Complete Pumps by Product Type III 6 Centrifugal Pumps III 7 Centrifugal Pumps by End Use and World Region (charts) III 8 Centrifugal Pump Market - Rankings by 63 Countries (table) III 9 Centrifugal Pump Market - Further Sub-Division III 10 Reciprocating Pumps III 11 Reciprocating Pumps by End Use and World Region (charts) III 12 Reciprocating Pump Market - Rankings by 63 Countries (table) III 13 Reciprocating Pump Market - Further Sub-Division III 14 Rotary Pumps III 15 Rotary Pumps by End Use and World Region (charts) III 16 Rotary Pump Market - Rankings by 63 Countries (table) III 17 Rotary Pump Market - Further Sub-Division III 18 Residential & Other Pumps III 19 Residential & Other Pump Market - Rankings by 63 Countries (table) III 20

5 Contents - Volume 1 - Page 4 IV THE PUMP MARKET BY END USE INDUSTRY Introduction IV 1 Summary of Pump Market Size by end Use Industry IV 2 The World Pump Market by End Use Industry (table) IV 3 Methods of Analysis by End Use Industry IV 4- IV 10 Composition of Demand: Engineered, Standard and Special Purpose Pumps V 11 Market Sizes for Engineered Pumps (chart) IV 12 Market Sizes for Standard Pumps (chart) IV 13 Market Sizes for Special Purpose Pumps (chart) IV 14 Oil & Gas Production & Refining IV 15 Oil, Gas, Refining by 63 Countries IV 15 Oil, Gas, Refining - Ranking by 63 Countries (table) IV 16 Oil and Gas Production - market size (chart) IV 17 Oil and Gas Production - market change (chart) IV 18 Onshore Oil/Gas Requirements by Application (table) IV 19 Offhore Oil/Gas Requirements by Application (table) IV 20 Oil Refining - market size (chart) IV 21 Oil Refining - market change (chart) IV 22 Oil Refining - Requirements by Application (table) IV 23 Chemical Industry IV 24 Chemical Industry - World Capital Expenditure IV 25 (chart wth advanced/developing countries ) Trends in Capital Expenditure in Basic Chemicals in the Advanced Coutries IV 26 Chemicals - Ranking by 63 Countries (table) IV 27-IV 28 Basic Chemicals - market size (chart) IV 29 Basic Chemicals - market change (chart) IV 30 Basic Chemicals - Requirements by Application (table) IV 31

6 Contents - Volume 1 - Page 5 IV THE PUMP MARKET BY END USE INDUSTRY Other Chemicals - market size (chart) IV 32 Other Chemicals - market change (chart) IV 33 Other Chemicals - Requirements by Application (table) IV 34 Power Generation IV 35 Power Generation - Ranking by 63 Countries (table) IV 35-IV 36 Power Generation - market size (chart) IV 37 Power Generation - market change (chart) IV 38 Coal/Oil Fired Power Generation - Requirements by Application (table) IV 39 Gas Turbine/Combined Cycle Power Generation - Requirements by Application (table) IV 40 Nuclear Power Generation - Requirements by Application (table) IV 41 Hydroelectric Power Generation - Requirements by Application (table) IV 42 Water & Wastewater Treatment IV 43 Water & Wastewater Treatment - Ranking by 63 Countries (table) IV 45-IV 46 Water & Wastewater Treatment - market size (chart) IV 47 Water & Wastewater Treatment - market change (chart) IV 48 Water & Wastewater Treatment - Requirements by World Region (table) IV 49

7 Contents - Volume 1 - Page 6 IV THE PUMP MARKET BY END USE INDUSTRY General Industry IV 50 General Industry - Ranking by 63 Countries (table) IV 51 - IV 52 Mining (chart on market size) IV 53 World Mining Capital Expenditure (text, chart) IV 54 Mining (chart on change in market size) IV 55 Mining - pump requirements by application IV 56 World Pulp & Paper Capital Expenditure (text, chart) IV 57 Pulp & Paper (charts on market size & growth) IV 58 - IV 59 Pulp & Paper - pump requirements by application IV 60 Food, Drink, Pharmaceuticals (charts on market size & growth) IV 61 - IV 62 Food, Drink, Pharmaceuticals - pump requirements by application IV 63 Metal Manufacturing (charts on market size & growth) IV 64 - IV 65 Metal Manufacturing - pump requirements by application IV 66 World Shipbuilding Trends (text, chart) IV 67 Marine (charts on market size & growth) IV 68 - IV 69 Marine - pump requirements by application IV 70 Construction Related and Other Industries IV 71 Industrial Buildings (charts on size & growth) IV Construction Dewatering by World Region (table) IV 73 - IV 74 Residential & Other Pumps (charts on size & growth) IV 75 - IV 76 Other Industries (charts on size & growth) IV 77- IV 78 New estimates for construction dewatering (text, chart for USA & China) IV 79 Construction Related and Other Industries - table IV 80

8 Contents - Volume 1 - Page 7 V SOME CHANGES IN TECHNOLOGY Introduction V 1 Demand Side Technological Change V 1 Supply Side Technologicla Change V 2 Appendix - Methodology 1-3

9 The World Market for Pumps - Introduction - Page I 1 I INTRODUCTION The entire report consists of two separately-bound volumes which together contain the following sections: Volume 1 - Overview Covers macro-economic developments, the pump market by country, market by pump type, market by world region and end use industry I II III IV Introduction Global Issues The Market by Product Type The Market by End Use Volume 2 - Detailed Results by Country Analysis by Country - market forecasts for 63 countries Appendix on Methodology Free Excel Files Free excel files cover data for the forecast period shown in the report. They are available following completion of a form guaranteeing no-disclosure to third parties. Extra Excel Files These available to purchasers of the full repor t, (i.e Part I plus Part II) at additional cost. Details on coverage are given at the end of this section. European Industrial Forecasting Ltd 2014

10 The World Market for Pumps - Introduction - Page I 2 Coverage of the Report (excludes Minor Countries shown in excel files) The report has the following coverage: Covers 4.8 billion of the 6.5 billion world population 63 countries with the highest GDP are separately identified 90% of world GDP, 85% of the world pump market Pump market coverage for most end uses is around 85% of the world market but: - Mining: around 80% - Water & sewerage: around 80% What is provided: - Forecasts : complete pump market by end use and market size for Centrifugal Reciprocating & Rotary - Historical data : imports of complete pumps and pump parts by product type European Industrial Forecasting Ltd 2014

11 The World Market for Pumps - Introduction - Page I 3 Status of Annual Data Provided in the Report Although annual results are prov ided, the purpose is to show structural change by end use industry, country and world region. The annual figures are intended to capture the shape of the trade cycle, but th ey should not be regarded as a reliable shor t-term forecast for 2014/15 in full detail. This is because actual data ends in 2013 and is subject to revision. Figures for the current year (2014) are estimated and, from past experience, are subject to significant revision. Moreover it is not possible to take account of specific short-term developments affecting each end use in the individual countries. Major Changes Compared with Last Year s Report We have carried out revisions to historical m arket size in 2013 for all countries, based on a revised analysis of pump production and imports. In addition, data for mining, construction dewatering and chemicals have been revised substantially. Data for Japan has been re vised, based on recent government statistics. Forecast growth rates have also been revised in line with forecasts for GDP and capital investment in each of the 63 countries. Historical data are shown for minor countries in the supplementary excel files (as outlined on Page I 5). Attribution and Copyright This report was prepared by European Industrial Forecasting Ltd (EIF). EIF retains all copyright in the report, which may not be copied, in whole or in part, or distributed to any organisatio n, person or com pany other than the subscriber. European Industrial Forecasting Ltd 2014

12 The World Market for Pumps - Introduction - Page I 4 Extra Excel Files (available to purchasers of the full report, i.e Part I and Part II) These are available at additional cost. The files provide data shown in the report but also an historical and forecast time series They also provide a crossclassification of the market by end use and product type for each of the 63 countries. The end uses covered are: Oil Chemicals Power Generation Water & Wastewater General Industry For each of these end uses, a nd for each country, the pum p market is sub-divided into the following product types: Reciprocating - Piston/Plunger Reciprocating - Other Reciprocating Pumps Rotary - Gear Rotary - Vane Rotary - Screw Rotary - Other Rotary Pumps Centrifugal - Submersible Motor Centrifugal - Single stage, single entry - close coupled Centrifugal - Single stage, single entry - long coupled Centrifugal - Single stage, double suction Centrifugal - Multistage (exc. submersible & axial/mixed flow) Centrifugal - Other Centrifugal Pumps Other Pumps Total All Pumps New Extra Excel files for the 2014 Report: please see overleaf European Industrial Forecasting Ltd 2014

13 The World Market for Pumps - Introduction - Page I 5 New Extra Excel Files for the 2014 Report Data for the following 13 minor countries are included: Angola Croatia Cyprus Estonia Georgia Jordan Kazakhstan Latvia Lithuania Peru Slovenia Slovakia Ukraine A summary file shows total market size for each country annually , together with the CAGR % A detailed file shows market size for each country annually subdivided into: Oil & Gas Chemicals Power Generation Water/Wastewater General Industry European Industrial Forecasting Ltd 2014

14 The World Market for Pumps - Global Issues - Page II 1 II GLOBAL ISSUES The growth of China, which averaged over 9% per year for the last two decades, now seems to have entered a new phase, with underling growth averaging no more than 7.5% p.a. This may not seem to be a significant difference, but it has a major effect on certain end use industries, notably m ining and oil and gas. Countries supplying raw materials to China, notably Australia, Brazil, Indonesia, Chile and South Africa will have to adjust to a new level of demand. Germany, a major beneficiary of fast growth in China owing to its dominant position in the supply of capital goods, will also be affected by the slowdown. On the positive side, a collapse of the Euro - a real possibility last year - appears to have been averted, at least in the short-term. Some commentators have suggested that world economic growth is now a thing of the pa st. Although we are m ore optimistic in this respect, it seems clear that the current weakness in the growth of world trade and GDP will probably persist for the next 12 months. This is because underlying growth in the Western world (USA/Canada, West Europe and Japan) was held back by the burden of accumulated debt. The forecasts presented in this report reflect expectations that overall world growth will be relatively slow Even these c onservative assumptions may prove to be over-optimistic if there is a further deterioration in the Middle East political situation. Charts on the next page show annual growth rates and m arket size in the present report, compared with results from last year. Growth rates are shown in the table below. Annual % Change in World Pump Market (includes price inflation) This Year Last Year % 1.5% % 4.7% % 6.1% % 7.1% % 7.6% % 8.3% % (C) European Industrial Forecasting Ltd 2014

15 The World Market for Pumps - Global Issues - Page II 2 Market for Complete Pumps World - Annual Growth Rates and Market Size - This Year, Last Year % Growth ($ million, current prices, 2010 exchange rates) World - All End Uses - Oct 2013 Oct $ million current prices, 2010 exchange rates World - All End Uses - Oct 2013 Oct-14 (C) European Industrial Forecasting Ltd 2014

16 The World Market for Pumps - Global Issues - Page II 3 The Relative Growth of Industrial and Developing Countries Over the twenty years prior to the recession developing country m arkets for pumps h ave consistently grown faster than those of industrial countries. Growth was around 9% p.a in developing compared with 6% in industrial. Most developing countries experienced recession in owing to international trade linkages, but m arket decline was generally much less than in the industrial countries. Ho wever, over the next five years we do expect that, to a s mall extent, developing countries will improve their growth rate relative to industrial compared with the last twenty years. In Asia the growth of China has acted as a catalyst for the whole region. Growth in Latin America is now expected to be more stable than in the past. However the recovery of grow th in West Europe, USA/Canada and Japan is expected to be slower than experienced i n previous recessions owing to the huge increase in indebtedness as a the result of the financial crisis. The growth of the pum p market in industrial and developing countries is shown on the next page. (C) European Industrial Forecasting Ltd 2014

17 The World Market for Pumps - Global Issues - Page II 4 Relative Pump Market Size: Industrial and Developing Countries $ million current prices, 2010 exchange rates $ million current prices, 2010 exchange rates Total All Pumps - Developing Advanced World Pump Market Complete Pumps, including prime movers, excluding parts Base data $ million current prices, 2010 exchange rates Industrial Countries* Developing Countries All Countries $ million $ million $ million $ million Annual % Growth Rates % % % 2009 % % % % % Forecast 2014 % % % % % % * West Europe, USA/Canada, Japan, Australia, New Zealand (C) European Industrial Forecasting Ltd 2014

18 The World Market for Pumps - Global Issues - Page II 5 Impact of Prices and Exchange Rates on Market Size and Growth Numbers throughout this report are presented in doll ars at current prices, 2010 exchange rates (i.e. including inflation). This price basis is the closest we can get to results for individual companies (excluding net acquisitions and currency change). Market size in 2010, on this basis, was $35.5 billion, rising to $58.8 billion in 2019, as shown in the table on the next page. Market at 2010 Prices, 2010 Exchange Rates If we adjust for domestic market price changes, but value the market at constant 2010 $ exchange rates (i.e. excluding inflation), the table on the next page shows that market size in 2019 is $48.8 billion, compared with $58.8 billion at current prices. Market at Current Prices, Current Exchange Rates If we allow for changes in both domestic prices and dollar exchange rates, market size in 2019 is estimated at $64.3 billion, compared with $58.8 billion at current prices, 2010 exchange rates. We expect the dollar exchange rate to depreciate. The table shows our assumptions about the dollar exchange rate index (C) European Industrial Forecasting Ltd 2014

19 The World Market for Pumps - Global Issues - Page II 6 World Pump Market Size on Different Price Bases (1) Constant Prices, Constant Exchange Rates (2) Current Prices, Constant Exchange Rates (basis for this report) (3) Current Prices, Current Exchange Rates Market Price Market Dollar Market $m 2010 prices Index $m current prices * Exchange Rate $m current prices 2010 exchange rates 2010= exchange rates Index 2010=100 current exchange rates * price basis for EIF Report in results include price inflation EIF reports before 2011 presented results at constant prices (i.e excluding inflation) (C) European Industrial Forecasting Ltd 2014

20 The World Market for Pumps - Global Issues - Page II 7 PUMP MARKET SUMMARY Forecasts for the pum p market provided in this report are conditional on macro-economic assumptions and trends in investment discussed later in this section. Given these assum ptions, pump market forecasts are arrived at by regression equations linking historical data on the pump market with historical data on investment in plant and equipment by end use industry. This section starts by sum marising the pum p market forecasts and then continues by providing the macro-economic forecasts and some of the trends in investment by end use industry which helped to determine the pump market forecasts. Market size in 2014 is shown on Page II 8-II 9. The overall growth rate is 6.9%, compared with 2.3% The forecast growth rate is a little faster than the 6% underlying trend growth, which is explained by catching up from the below trend performance The pump market in water/wastewater is shown at the foot of the table on the next page. All water/wastewater (industrial plus m unicipal) accounts for around 33% of the world pump market in These figures exclude pumps for construction dewatering, industrial buildings and residential buildings. (C) European Industrial Forecasting Ltd 2014

21 The World Market for Pumps - Global Issues - Page II 8 World Pump Market by Region and End Use complete pumps, inc. drivers, exc. parts Market by World Region $ million 2014 CAGR % CAGR % Current Prices Germany Other West Europe Russia Other East Europe Africa Middle East China India Japan Pacific Rim 1) Other Asia 2) USA/Canada Latin America Total World Market Market by End Use Oil, Gas, Refining Chemicals Power Generation Water/Wastewater (Municipal) General Industry Thailand, South Korea, Taiwan, Singapore, Indonesia, Malaysia, Hong Kong, Philippines, Vietnam 2) Pakistan, Australia, New Zealand 1) World Pump Market for Water/Wastewater etc complete pumps, inc. drivers, exc. parts All Water/Wastewater $ million 2013 CAGR % CAGR % Current Prices Water/Wastewater-Industrial 3) Water/Wastewater-Municipal Water/Wastewater-Total ) Shown as applications in separate industrial end uses Note that construction dewatering, building services and domestic i.e. residential (shown separately in general industry) are excluded from the above figures for water/wastewater-total (C) European Industrial Forecasting Ltd 2014

22 The World Market for Pumps - Global Issues - Page II 9 Sub-division of Pump Market in General Industry complete pumps, inc. drivers, exc. parts General Industry Sub-Division $ million 2014 CAGR % CAGR % Current Prices Mining Food Drink Pharmaceuticals Pulp & Paper Metal Manufacturing Harbours, docks, canals Shipbuilding Building Services Construction dewatering Other Industry Domestic General Industry Total World Market by Pump Type complete pumps, inc. drivers, exc. parts Market by Pump Type $ million 2014 CAGR % CAGR % Current Prices Centrifugal Reciprocating Rotary Other Total Pump Market (C) European Industrial Forecasting Ltd 2014

23 The World Market for Pumps - Global Issues - Page II 10 Cyclical Fluctuations in the Pump Market Charts showing annual changes in the pump market at current prices, 2010 exchange rates are shown on the following pages: Page II 11: West Europe, USA/Canada and Japan Page II 12: Russia, Other East Europe, Middle East/Africa Page II 13: China, India Page II 14: Pacific Rim, Latin America All countries/regions were affected by the recession , with the advanced industrial countries faring the worst. (C) European Industrial Forecasting Ltd 2014

24 The World Market for Pumps - Global Issues - Page II 11 Industrial Countries - Pump Market - Annual Volume % Growth Rates % Growth ($ million, current prices, 2010 exchange rates) WEST EUROPE - ALL END USES - Oct 2013 Oct-14 % Growth ($ million, current prices, 2010 exchange rates) USA/CANADA - ALL END USES - Oct 2013 Oct-14 % Growth ($ million, current prices, 2010 exchange rates) JAPAN - ALL END USES - Oct 2013 Oct-14 (C) European Industrial Forecasting Ltd 2014

25 The World Market for Pumps - Global Issues - Page II 12 Developing Countries - Pump Market - Annual % Growth Rates % Growth ($ million, current prices, 2010 exchange rates) RUSSIA - ALL END USES - Oct 2013 Oct-14 % Growth ($ million, current prices, 2010 exchange rates) OTHER EAST EUROPE - ALL END USES - Oct 2013 Oct-14 % Growth ($ million, current prices, 2010 exchange rates) MIDDLE EAST - ALL END USES - Oct 2013 (C) European Industrial Forecasting Ltd 2014 Oct-14

26 The World Market for Pumps - Global Issues - Page II 13 Developing Countries Pump Market - Annual % Growth Rates % Growth ($ million, current prices, 2010 exchange rates) CHINA - ALL END USES - Oct 2013 Oct-14 % Growth ($ million, current prices, 2010 exchange rates) INDIA - ALL END USES - Oct 2013 Oct-14 (C) European Industrial Forecasting Ltd 2014

27 The World Market for Pumps - Global Issues - Page II 14 Developing Countries Pump Market - Annual % Growth Rates % Growth ($ million, current prices, 2010 exchange rates) PACIFIC RIM - ALL END USES - Oct 2013 Oct-14 % Growth ($ million, current prices, 2010 exchange rates) LATIN AMERICA - ALL END USES - Oct 2013 Oct-14 (C) European Industrial Forecasting Ltd 2014

28 The World Market for Pumps - Global Issues - Page II 15 The Relative Growth of Pump Markets in Industrial and Developing Countries by End Use Industry The charts on the next five page show the market size for industrial and developing countries in oil, chemicals, power, water and general industry. Markets in developing countries expected to grow faster than in industrial countries, as in the past. However, since the financial crisis of 2008/9 the out-performance of growth in developing countrie s relative to industrial countries has been reduced substantially. (C) European Industrial Forecasting Ltd 2014

29 The World Market for Pumps - Global Issues - Page II 16 World Market for Oil & Gas Pump Market in Industrial and Developing Countries $ million current prices, 2010 exchange rates $ million current prices, 2010 exchange rates Oil & Gas - Developing Advanced (C) European Industrial Forecasting Ltd 2014

30 The World Market for Pumps - Global Issues - Page II 17 World Market for Chemicals Pump Market in Industrial and Developing Countries $ million current prices, 2010 exchange rates $ million current prices, 2010 exchange rates Chemicals - Developing Advanced (C) European Industrial Forecasting Ltd 2014

31 The World Market for Pumps - Global Issues - Page II 18 Power Generation and the Impact of Renewable Energy on the Market for Pumps One reason for the w idening gap in demand between industrial and developing countries, shown in the chart below, is the importance of wind and solar energy in industrial countries. Renewable energy has a m uch lower priority in developing countries. Wind energy has m inimal demand for pumps. While solar thermal power does have large pump requirements, photovoltaic accounts for most additions to solar capacity and this also has m inimal pump requirements. Over the next five years we have estimated that the switch to renewable energy for new projects wi ll cut world demand for pumps in power generation by 40% compared with what it would have been had conventional thermal or nuclear power plants been adopted.. World Market for Power Generation Pump Market in Industrial and Developing Countries $ million current prices, 2010 exchange rates $ million current prices, 2010 exchange rates (C) Power European Generation Industrial - Developing Forecasting Ltd 2014 Advanced

32 The World Market for Pumps - Global Issues - Page II 19 World Market for Municipal Water/Wastewater Pump Market in Industrial and Developing Countries $ million current prices, 2010 exchange rates $ million current prices, 2010 exchange rates Water - Developing Advanced (C) European Industrial Forecasting Ltd 2014

33 The World Market for Pumps - Global Issues - Page II 20 General Industry The chart below shows market size in industrial and developing countries. General industry includes mining. Last year we made a major revision to market size for mining, which now includes all mining and quarrying activities (rather than just metal mineral processing which was covered in reports before 2012). World Market for General Industry Pump Market in Industrial and Developing Countries $ million current prices, 2010 exchange rates $ million current prices, 2010 exchange rates General Industry - Developing Advanced (C) European Industrial Forecasting Ltd 2014

34 The World Market for Pumps - Global Issues - Page II 21 The Market for Complete Pumps in 63 Countries The following pages show the market for complete pumps in each of 63 countries. Countries are grouped into world regions as follows: Asia - Page II 22 West Europe - Page II 23 East Europe - Page II 24 Africa & Middle East - Page II 25 America - Page II 26 (C) European Industrial Forecasting Ltd 2014

35 The World Market for Pumps - Global Issues - Page II 22 Pump Markets in Asia Complete Pumps, inc. Prime Movers, exc. Parts $ million current prices, 2010 exchange rates Country CAGR% CAGR% $million $million $million $million $million $million 2013/ /2014 Australia China Hong Kong India Indonesia Japan Korea - South Malaysia New Zealand Pakistan Philippines Singapore Taiwan Thailand Vietnam (C) European Industrial Forecasting Ltd 2014

36 The World Market for Pumps - Global Issues - Page II 23 Pump Markets in West Europe Complete Pumps, inc. Prime Movers, exc. Parts $ million current prices, 2010 exchange rates Country CAGR% CAGR% $million $million $million $million $million $million 2013/ /2014 Austria Belgium Denmark Finland France Germany Greece Ireland Italy Netherlands Norway Portugal Spain Sweden Switzerland United Kingdom (C) European Industrial Forecasting Ltd 2014

37 The World Market for Pumps - Global Issues - Page II 24 Pump Markets in East Europe Complete Pumps, inc. Prime Movers, exc. Parts $ million current prices, 2010 exchange rates Country CAGR% CAGR% $million $million $million $million $million $million 2013/ /2014 Bulgaria Czech Republic Hungary Poland Romania Russia (C) European Industrial Forecasting Ltd 2014

38 The World Market for Pumps - Global Issues - Page II 25 Pump Markets in Africa & Middle East Complete Pumps, inc. Prime Movers, exc. Parts $ million current prices, 2010 exchange rates Country CAGR% CAGR% $million $million $million $million $million $million 2013/ /2014 Algeria Bahrein Egypt Iran Iraq Israel Kuwait Libya Morocco Nigeria Oman Qatar South Africa Saudi Arabia Syria Tunisia Turkey UAE (C) European Industrial Forecasting Ltd 2014

39 The World Market for Pumps - Global Issues - Page II 26 Pump Markets in America Complete Pumps, inc. Prime Movers, exc. Parts $ million current prices, 2010 exchange rates Country CAGR% CAGR% $million $million $million $million $million $million 2013/ /2014 Argentina Brazil Canada Chile Colombia Mexico United States Venezuela (C) European Industrial Forecasting Ltd 2014

40 The World Market for Pumps - Global Issues - Page II 27 Macro-Economics, GDP and Investment The driving forces behind the world economy are the growth of GDP and capital investment. Capital investment, which is more relevant to the dem and for pumps, fluctuates much more than GDP. These fluctuations are shown in the chart on the next page. We expect a steady recovery in the growth of GDP and capital investment from 2014 onwards. World trade volume, shown in the table at the foot of the next page, is expected to resume its trend rate of growth of around 6% per year from 2015 onwards. (C) European Industrial Forecasting Ltd 2014

41 The World Market for Pumps - Global Issues - Page II 28 Annual % Change in the volume of GDP and Capital Investment - Total for World 10 5 % Growth GDP Investment Source: IMF, OECD, EIF estimates Forecast Volume Growth of OECD Exports of Goods & Services Percent per year Export Volume Source: OECD, EIF estimates (C) European Industrial Forecasting Ltd 2014

42 The World Market for Pumps - Global Issues - Page II 29 Forecasts of GDP Growth by Country GDP growth in Western industrialised countries is expected to be relatively slow over the forecast period owing to indebtedness, and this will have some restraining effect on the growth of developing countries. Results for each of the 63 countries are given in tables on the following pages: West Europe - Page II 30 East Europe - Page II 31 Africa & Middle East - Page II 32 Asia - Page II 33 America - Page II 34 (C) European Industrial Forecasting Ltd 2014

43 The World Market for Pumps - Global Issues - Page II 30 GDP Growth Rates for West Europe (Volume % p.a.) CAGR = Compound Annual Average % Growth Rate Country CAGR% CAGR% % growth % growth % growth % growth % growth % growth 2013/ /2014 Austria Belgium Denmark Finland France Germany Greece Ireland Italy Netherlands Norway Portugal Spain Sweden Switzerland United Kingdom Source: EIF estimates, IMF (C) European Industrial Forecasting Ltd 2014

44 The World Market for Pumps - Global Issues - Page II 31 GDP Growth Rates for East Europe (Volume % p.a.) CAGR = Compound Annual Average % Growth Rate Country CAGR% CAGR% % growth % growth % growth % growth % growth % growth 2013/ /2014 Bulgaria Czech Republic Hungary Poland Romania Russia Source: EIF estimates, IMF (C) European Industrial Forecasting Ltd 2014

45 The World Market for Pumps - Global Issues - Page II 32 GDP Growth Rates for Africa/Middle East (Volume % p.a.) CAGR = Compound Annual Average % Growth Rate Country CAGR% CAGR% % growth % growth % growth % growth % growth % growth 2013/ /2014 Algeria Bahrain Egypt Iran Iraq Israel Kuwait Libya Morocco Nigeria Oman Qatar South Africa Saudi Arabia Syria Tunisia Turkey United Arab Emirates Source: EIF estimates, IMF (C) European Industrial Forecasting Ltd 2014

46 The World Market for Pumps - Global Issues - Page II 33 GDP Growth Rates for Asia (Volume % p.a.) CAGR = Compound Annual Average % Growth Rate Country CAGR% CAGR% % growth % growth % growth % growth % growth % growth 2013/ /2014 Australia China Hong Kong India Indonesia Japan Republic of Korea Malaysia New Zealand Pakistan Philippines Singapore Taiwan Thailand Vietnam Source: EIF estimates, IMF (C) European Industrial Forecasting Ltd 2014

47 The World Market for Pumps - Global Issues - Page II 34 GDP Growth Rates for America (Volume % p.a.) CAGR = Compound Annual Average % Growth Rate Country CAGR% CAGR% % growth % growth % growth % growth % growth % growth 2013/ /2014 Argentina Brazil Canada Chile Colombia Mexico United States Venezuela Source: EIF estimates, IMF (C) European Industrial Forecasting Ltd 2014

48 The World Market for Pumps - Global Issues - Page II 35 Forecasts for the Growth of Capital Investment When it comes to forecasting the growth of the pump market, the growth of capital investment is more relevant than GDP. Consequently, we link our forecasts for the total market for pumps in each country to our forecasts of capital investment. Results for each of the 63 countries are given in tables on the following pages: West Europe - Page II 36 East Europe - Page II 37 Africa & Middle East - Page II 38 Asia - Page II 39 America - Page II 40 (C) European Industrial Forecasting Ltd 2014

49 The World Market for Pumps - Global Issues - Page II 36 Capital Investment Growth Rates for West Europe (Volume % p.a.) CAGR = Compound Annual Average % Growth Rate Country CAGR% CAGR% % growth % growth % growth % growth % growth % growth 2013/ /2014 Austria Belgium Denmark Finland France Germany Greece Ireland Italy Netherlands Norway Portugal Spain Sweden Switzerland United Kingdom Source: EIF estimates, IMF (C) European Industrial Forecasting Ltd 2014

50 The World Market for Pumps - Global Issues - Page II 37 Capital Investment Growth Rates for East Europe (Volume % p.a.) CAGR = Compound Annual Average % Growth Rate Country CAGR% CAGR% % growth % growth % growth % growth % growth % growth 2013/ /2014 Bulgaria Czech Republic Hungary Poland Romania Russia Source: EIF estimates, IMF (C) European Industrial Forecasting Ltd 2014

51 The World Market for Pumps - Global Issues - Page II 38 Capital Investment Growth Rates for Middle East/Africa (Volume % p.a.) CAGR = Compound Annual Average % Growth Rate Country CAGR% CAGR% % growth % growth % growth % growth % growth % growth 2013/ /2014 Algeria Bahrain Egypt Iran Iraq Israel Kuwait Libya Morocco Nigeria Oman Qatar South Africa Saudi Arabia Syria Tunisia Turkey United Arab Emirates Source: EIF estimates, IMF (C) European Industrial Forecasting Ltd 2014

52 The World Market for Pumps - Global Issues - Page II 39 Capital Investment Growth Rates for Asia Pacific (Volume % p.a.) CAGR = Compound Annual Average % Growth Rate Country CAGR% CAGR% % growth % growth % growth % growth % growth % growth 2013/ /2014 Australia China Hong Kong India Indonesia Japan Republic of Korea Malaysia New Zealand Pakistan Philippines Singapore Taiwan Thailand Vietnam Source: EIF estimates, IMF (C) European Industrial Forecasting Ltd 2014

53 The World Market for Pumps - Global Issues - Page II 40 Capital Investment Growth Rates for America (Volume % p.a.) CAGR = Compound Annual Average % Growth Rate Country CAGR% CAGR% % growth % growth % growth % growth % growth % growth 2013/ /2014 Argentina Brazil Canada Chile Colombia Mexico United States Venezuela Source: EIF estimates, IMF (C) European Industrial Forecasting Ltd 2014

54 The World Market for Pumps - Global Issues - Page II 41 Pump Markets in the World's largest Countries/Regions In this section we consid er developments in the world's largest countries by population and land area, which are summarised in the table below. Some Key Issues affecting the Largest Countries/Regions West Europe Slow growth in Euro area and danger of deflation USA Fracking a game changer for the US economy Japan Recovery uncertain despite new monetary policy Russia Sanctions and falling oil prices present a problem China Marked slowdown 2013/4 affects Brazil, Australia etc India Underlying macro problems have adverse effect on pump market Brazil Short term setback, but good long term prospects (C) European Industrial Forecasting Ltd 2014

55 The World Market for Pumps - Global Issues - Page II 42 West Europe The last historical peak in market size was in 2008, and the market declined, or was more of less static, A significant recovery is expected from 2015 onwards, but it should be remembered that the forecasts include price inflation of around 2.5% per year. Complete Pump Market Trends for West Europe - $ million current prices General Industry Water Power Generation Chemicals Oil & Gas (C) European Industrial Forecasting Ltd 2014

56 The World Market for Pumps - Global Issues - Page II 43 United States Over the forecast period the US market is expect ed to grow stro ngly, particularly when com pared with historical trends. This is because of the dramatic growth in oil and gas production as a result of fracking. The US will become an exporter of liquefied natu ral gas. The US chem ical industry is expected to expand from 2013 onwards, in stark contrast to the last decade when stagnation or contraction was th e norm, as a resul t of low gas feedstock prices. The dire ct effects of buoyancy in oil, gas and chemicals will have positive indirect effects on the rest of the economy. Complete Pump Market Trends for USA - $m current prices General Industry Water Power Generation Chemicals Oil & Gas (C) European Industrial Forecasting Ltd 2014

57 The World Market for Pumps - Global Issues - Page II 44 Russia There was a strong growth in t he market , largely as a result of high oil prices. Oil prices are expected to weaken in the short term, but to remain stable from 2015 onwards. This will support continued market growth, but at a slower rate than in the past. Note that we are not making allowance for adverse effects of sanctions on the economy, so our forecast could be optimistic. Complete Pump Market Trends for Russia $m current prices, 2010 exchange rates General Industry Water Power Generation Chemicals Oil & Gas (C) European Industrial Forecasting Ltd 2014

58 The World Market for Pumps - Global Issues - Page II 45 China The chart below s ummarises the results. The market grew at an incredible rate but growth slowed Recovery is expected from 2014, but growth is expected to be slower than over the last ten years. Complete Pump Market Trends for China $m current prices, 2010 exchange rates General Industry Water Power Generation Chemicals Oil & Gas (C) European Industrial Forecasting Ltd 2014