Over the next 5 to 7 years, this market is expected to witness robust revenue growth in the mid-single digits at the overall market level. However, companies able to address key trends in the market could witness much higher growth.
To achieve a revenue growth rate higher than those of their competitors’, market participants must tackle the following challenges:
- Customer demand for one-stop shops
- Customer demand for local presence across North America and other regions of the world
- Price competition from hundreds of small laboratories
- Reducing availability of skilled workers
- Increasing penetration of modular instrumentation in the installed base of assets
- Increasing complexity of instrumentation
In addition, outstanding performance will come from those companies that are able to not only strike the right balance between the three key aspects of the calibration and repair service industry (quality, turnaround time (TAT) and price) for their target markets, but also lessen the burden of calibration and repair on customers and contribute to improving their operations. Providing actionable insights about their operations to customers is currently a trend in its infancy in the calibration and repair service market but it is expected to grow in importance over the forecast period.
While quality and safety requirements are constantly growing across industries, the proliferation of high-tech products, especially in industries where the cost of failure is high such as aerospace and defense (A&D), life sciences (LS), and automotive, is expected to drive demand for calibration and repair services in North America over the next few years. The higher complexity of smart products calls for more testing and attention to details in the design stage, resulting in a greater need for more complex and accurate instrumentation. This drives demand for calibration and repair services by requiring more complex calibration routines and procedures as well as tighter calibration intervals to limit the number and the importance of out-of-tolerance issues found when calibrating the instruments.
Covering all types of providers of calibration and repair services including original equipment manufacturers (OEMs), third-party service providers (TSPs), and in-house laboratories, the research highlights the growing importance of the outsourced part of the market, especially that of TSPs, which are in a better position than the OEMs to address the need from customers for a wide scope of capabilities spanning electrical, mechanical, physical/dimensional and thermodynamic parameters. Key TSPs in North America include Tektronix, SIMCO Electronics, Transcat, Trescal, Micro Precision Calibration (MPC), J.A. King & Company, Technical Maintenance Inc (TMI), and ESSCO Calibration.
The acquisitions of a few companies and the organic geographic expansion efforts of strong regional participants have impacted the competitive landscape over the past 3 to 5 years and this is expected to continue during the forecast period. Another trend expected to shake things up in the calibration and repair services market in North America from a competitive standpoint is the greater interest from Keysight Technologies in the calibration service space. Overall, each participant has its respective strengths and weaknesses. End-user targets and market strategies also vary widely, and are expected to result in different business performance for each company.
The calibration and repair services market mainly relies on the installed base of instruments and hence changes in the new test equipment market have a lower impact on market participants. For the long term, participants should be aware of the growth of modular instrumentation in the market, which has been strong in the wireless communications manufacturing space. Modular instrumentation also presents an interesting challenge to calibration laboratories due to lower awareness among customers about the need for calibrating such instrumentation. Moreover, this is expected to drive the market toward more customization in calibration and system-level calibration.
Quantification of these trends and other analyses of the market by end-user segment, region, and parameter are provided in an upcoming study from Frost & Sullivan titled Calibration and Repair Services Market: Product Complexity and Quality Generate Opportunities in North America (K0A2-30).
