WASHINGTON–()–Companies selling laser and other optical products into the global machine tool sector should expect a decline in sales in 2019 near 10%, compared to 2018. This would place this year’s sales for components and systems in the category near the value for 2017, second only to 2018, according to the mid-year forecast from the industry trade association OIDA (OSA Industry Development Associates).

“This continues to be a ‘half full and half empty’ market for companies in this sector,” said Dr. Tom Hausken, OSA Senior Industry Advisor. “Sales are off from the peak, but it is mid-2019 and the economy is holding.” Many economic indicators in the U.S. are nominally very good, such as record low unemployment and low inflation but economists warn that the economy is fragile, and particularly vulnerable to repercussions from trade disputes, Hausken notes. A large part of the growth in recent years has been to Chinese customers, with sales by prominent laser companies to China as much as 43% of company revenues, making them especially exposed in a trade war. Investors reacted in 2018, and the share prices of some companies in the sector were driven down by 50% or more.

OIDA monitors over two dozen companies in the sector, and tracks quarterly results of a group that have combined revenues over U.S. $40 billion annually. OIDA’s index indicates a stronger decline than usual in Q1 2019, falling 14% from the previous quarter, following weakness in the second half of 2018. OIDA expects quarter-over-quarter growth in Q2, but sales in the second half are unlikely to match the levels of 2018.

“Longer term, OIDA expects compounded growth in the range of 5%, slightly greater than global economic growth,” Hausken adds. “But current conditions may delay a return to growth until after 2019, or possibly after 2020.”

More information appears in OIDA’s upcoming OIDA Market Update, available to OIDA members. For media inquiries or a copy of the report, contact [email protected].

About OIDA

OSA Industry Development Associates (OIDA), a trade association operated as a division of The Optical Society (OSA), serves and represents organizations engaged in the business of optics and photonics–from start-ups to Fortune 500s. In support of its member companies, OIDA promotes and protects the business of optics and photonics in driving innovation, creating jobs, and accelerating growth in the U.S. and around the world. OIDA provides exclusive roadmap reports and market data for the industry, serves as the voice of the industry to government and academia, acts as a liaison with other trade associations worldwide and provides a network for the exchange of ideas and information within the optics and photonics community.

About The Optical Society

Founded in 1916, The Optical Society (OSA) is the leading professional organization for scientists, engineers, students and business leaders who fuel discoveries, shape real-life applications and accelerate achievements in the science of light. Through world-renowned publications, meetings and membership initiatives, OSA provides quality research, inspired interactions and dedicated resources for its extensive global network of optics and photonics experts. For more information, visit osa.org.

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