For seemingly everyone, the past few years have been turbulent in one way or an- other, as governments, industries, and individuals grappled with the consequences and effects of the COVID-19 pandemic, which, although better understood and managed, persists. In some respects, the lab and analytical instruments market has been buffered from these effects; the industry, as a whole, has maintained its positive growth trajectory. Individual technology segments, however, experienced wildly different levels of demand in 2020, followed by rebounding in 2021 of the segments that were adversely affected. Most recently, in 2022, demand has returned to more expected levels, although the spikes in revenues for some technologies in the year prior resulted in contraction of the segments, despite strong sales.

In 2022, the lab and process analytical instruments industry grew 3.8% to $84.7 billion. Broken down, the market for lab instruments expanded 3.6% to reach $77.6 billion; the process analytical instruments (PAI), and the lab enclosures and furniture markets experienced gains of 3.7% and 13.3% in 2022, for $4.9 and $2.2 billion in revenues, respectively. Although market growth for lab furniture and enclosures accelerated, the expansion of all other lab technology segments and PAI decelerated in 2022. In fact, the life science instruments market actually decreased slightly in 2022, following two years of growth exceeding 25%.

Most of the technology segments expanded by mid-single digits. In terms of end markets, the industrial and pharma/ biopharma/CRO application sectors led growth, while demand from other/applied customers dropped as clinical/diagnostics needs waned in accordance with pandemic dynamics. Regional growth was uneven as well, with demand in North America rising fastest, in part a result of the strong US dollar.

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With the continuation of the pandemic in 2022, the global economic recovery from COVID-19 has been hampered by periodic port shutdowns in China, continued supply-chain disruptions, and staffing challenges across industries. Since TDA’s 2022 Outlook was published, the war in Ukraine began, its being felt worldwide. Additionally, Europe is facing an energy crisis resulting from Russia’s cutting its supply of natural gas to Europe and resulting soaring energy costs. These factors are contributing to global Inflation, which threatens to curb economic growth worldwide.

Inflation, the reduced availability of raw materials, and ongoing supply-chain chain challenges are reducing growth in the analytical instruments industry. Currency effects are also contributing to the decreased purchasing power of some customers. With all of this in mind, we have adjusted our expectation of growth for the analytical instrument industry in 2022 downward a few percentage points to a market size of $78 billion.

In 2021, the process analytical instruments (PAI) market and PAI worldwide enterprise (which also includes the value of analyzer-related services) reached $4.7 billion and $7.5 billion, respectively. Over the next few years, demand from many end-user markets is expected to increase 5%–7% per year driven by solid growth from the pharmaceutical industry.

Combustion and emissions/environmental monitoring applications are expected to post robust growth. Geographically, the Western Europe and China will undergo the fastest growth over the coming years, while demand from Latin America and Eastern Europe will be somewhat anemic for the forecast period. The conflict between Russia and Ukraine has cast uncertainty across global markets. It has exacerbated supply chain disruptions and affected numerous sectors, including the agriculture, automobile, energy, and semiconductor industries. TDA’s PAI report includes predictions based on these recent events for energy independence, the Russian economy, and the relationship between Russia and China.