Market Challenges And Opportunities

Global Compressor Market Drivers:

Increasing demand from natural gas sector to propel the market growth: The demand for natural gas is increasing all over the world, as the consumption of this gas is growing, especially in Asia Pacific region. According to Coherent Market Insights, the demand for natural gas is likely to increase by 1.7% year-on-year during 2025 with consumption reaching 4,000 billion cubic meters by 2022. Coal and nuclear energy are increasingly being replaced by natural gas, as countries around the world are focusing on decarbonization and diversifying the energy supply in several regions worldwide. Extracting new sources of natural gas, like shale gas deposits are increasing the price pressure, which is driving the international trade of natural gas. This in turn is driving the demand for compressors in this industry, which in turn is expected to propel growth of the global compressor market over the forecast period.
Rise in demand from the petrochemical and refinery industry to augment the market growth: To setup a refinery, the expertise and experience in the sector is essential with high pressure of government regulations. The refining capacity however are increasing all over the world, and in the coming future, it is likely to continue to increase. As per the International Energy Agency, new additions of 1.2 million barrels is expected in the refining capacity in 2022. Moreover, favorable government policies with increasing inflow of Foreign Direct Investment in several sectors including petrochemicals, natural gas, and refineries are expected to benefit the compressor manufacturers around the world. Thus, the market is likely to gain significant growth in the coming future.

Global Compressor Market Opportunities:

Growing need for energy efficient compressors is expected to create growth opportunities in the global compressor market during the forecast period. Air/gas compression is an energy-intensive process that significantly impacts the consumption of energy and the efficiency of production/manufacturing systems. For instance, centrifugal compressors work better in applications that need high capacities above 12,000 cfm. Thus, relatively use more energy compared to smaller compressors. Thus, increasing need for energy efficient compressors is likely to lead to development of novel products, which in turn is expected to benefit the market in the coming years.

Increasing focus of manufacturers on energy efficiency is also expected to provide business opportunities in the global compressor market during the forecast period. Amidst the increasing end-user demands and changing standards of energy efficiency in several countries, manufacturers are taking initiatives to become more energy-efficient. With growing research and development activities for increasing efficiency of compressors, the market is likely to witness ample of growth opportunities in the near future.

Global Compressor Market Restraints:

Increasing growth of wind and solar power installations to impede market growth: With increasing awareness regarding environment, the demand for wind and solar power is increasing all over the world. The wind and solar PV power are likely to boost growth in renewable energy. Wind and solar are likely to produce more than 50% of the overall generation in Germany, Australia, the U.K., and Mexico. Moreover, due to the plummeting costs, the world is shifting toward renewables such as wind and solar. For instance, as per the International Renewable Energy Agency (IRENA), the global renewable energy share is likely to reach 30% by 2030 and increase to 50% by 2050. This in turn is expected to impact compressor demand adversely, which in turn is likely to hinder growth of the global compressor market during the forecast period.
Rise in financial losses, equipment downtime, and air leaks issues to hamper the market growth: Leaks, poor practices, and artificial demand can cause additional financial losses, unnecessary additions of capacity, and equipment downtime. An average compressed system can lose between 25 to 35% of compressed air to leaks; thus cost control need routine monitoring and repairs. Leakage problems can lead to largest wastage of compressed air energy at any manufacturing plant. Thus, the financial losses resulting from these issues are expected to hinder growth of the global compressor market during the forecast period. However, increasing technological development in compressors is likely to provide solutions to overcome these issues, which will support growth of the market in the coming future.