- By Clara Sipes
- February 05, 2025
- Interact Analysis
- Feature
Summary
The motion controls market in Europe, the Middle East and Africa (EMEA) contracted by over $700 million in 2024, representing a -13.5% decline in market revenues.
The motion controls market in Europe, the Middle East and Africa (EMEA) contracted by over $700 million in 2024, representing a -13.5% decline in market revenues. Despite the global market starting to mount a recovery in 2025, the outlook for EMEA remains somewhat pessimistic during the year. While every other region is expected to grow slightly in 2025, EMEA is forecast to contract by an additional -2.0% in revenue terms. War has created economic uncertainty in the region and EMEA’s motion controls market is now suffering from a dark triad; lack of capital investment has resulted in declining industrial production, which has further exacerbated the negative impacts of destocking.
By examining the forces affecting the EMEA region, we can build a clearer picture of what to expect out of the region over the coming years. This insight will place EMEA’s decline in context and provide perspective about when we can expect order growth to return to the region.
It all begins with capital investment
When evaluating the EMEA region in 2024, it is evident that a fundamental economic issue relating to capital investment has taken root.
The graph below shows quarter-on-quarter growth of capital investment in fixed assets across the EU. This series provides a fresh perspective on how levels of investment into assets like machinery, buildings, land, etc. have developed in the EU.
As you can see from the graph above, growth in capital investment slowed dramatically from Q1 of 2022, a period which coincides with the beginning of Russia’s war against Ukraine. Growth in capital investment remained low throughout 2023 until it started to contract in the months following the beginning of the war in Gaza.
It is clear the Ukraine-Russia and Israel-Palestine conflicts in the EMEA region have increased economic uncertainty, which has reduced investor confidence. Without this confidence, expansionary activities by manufacturers have slowed, negatively impacting industrial production and affecting underlying demand for motion control products.
Slowing capital investment has eroded industrial production
The lack of capital investment across Europe is now manifesting clearly as decreased industrial production. The graph below shows an index of the EU’s industrial production value against the same value in the US. This index tracks back to January of 2021 to demonstrate how activity in the region has altered since the start of the aforementioned conflicts.
In early 2023, industrial production in the EU began to diverge from the US. In line with the timing of sliding capital investment, this divergence demonstrates the negative impact stifled levels of investment have had on the manufacturing economy in Europe. As of November 2024, the gap between the two series has continued to widen, indicating a recovery has yet to begin.
The sliding of Europe’s industrial production impacts motion control vendors in two significant ways. Firstly, less industrial production means weaker underlying demand for motion control products. Secondly, slow industrial production extends the period of customer inventory destocking, which was a major factor in the decline seen in the motion control market during 2024. If you are interested in learning more about the destocking trend, we go into further depth on the topic in a separate insight which can be found here.
The destocking effect is not unique to EMEA, as it was a global phenomenon in the motion controls market. However, as other regions have experienced stronger industrial production growth in the second half of 2024, the period associated with destocking is beginning to resolve for these regions. Unfortunately for EMEA, sliding industrial production is likely to result in a period of destocking that extends for longer than in other regions.
What now?
With destocking expected to continue in Europe, the timing of when destocking subsides, and orders return has become one of the primary factors when determining the region’s expected growth rate for 2025. EMEA is predicted to perform most poorly in 2025, contracting by -2.0%. This is significantly lower compared with other regions, where growth is expected to take place as follows:
- Americas: 3.5%
- Japan: 2.9%
- APAC (excluding Japan): 1.3%
During interviews with suppliers of motion control products, we received reporting that order growth resumed by Q4 2024 in many regions outside of EMEA. This indicates that an end to the destocking period for these regions is near. Europe on the other hand is expected to continue to be impacted by destocking amid a low industrial production environment. As a result, we do not expect significant order growth to return to the region until Q3 2025 at the earliest.
While the lagging return to orders results in another contractionary year for the EMEA region, the forecast above demonstrates our confidence that growth will return. Motion control revenues in EMEA are expected to return to positive growth in 2026 and 2027 and to continue growing throughout our forecast period, surpassing 2023 values by 2029.
Final thoughts
Viewing the path of EMEA’s decline, we can see how geopolitical issues created a domino effect resulting in declining capital formation and industrial production. These two macroeconomic forces are expected to compound the destocking issue the region is already facing, leading to EMEA’s continued poor performance in 2025. While EMEA is likely to continue to face a relatively difficult recovery when compared with other regions, the resolution of the destocking period in mid-2025 will lead to a return to growth and an end to the rampant volatility the market has faced as of late.
About The Author
Clara Sipes is a market research analyst with Interact Analysis specializing in the Industrial Automation sector. With a degree in International Business and a minor in Risk Management from the McCombs School of Business at the University of Texas at Austin, Clara leverages a strong academic background and analytical skills to drive insights and strategies in the industry.
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