The world has been justly preoccupied with the spread of COVID-19 throughout the world and its effects on human health. From a science standpoint, the life science and analytical instrumentation industry has responded to help combat the disease, by supporting research into better diagnosis, treatment, and prevention of the disease. From a business perspective, there has also been great concern about the effect of the pandemic on the economies of different regions, or the differential effects on global industry and trade. While tools that can be used to combat the disease are seeing extremely rapid uptake, tools that serve other markets are seeing steep declines in demand. For companies involved in these markets, planning is difficult when there are such market upheavals. SDi and the rest of Science and Medicine Group are committed to providing our clients with timely and actionable information to help move their businesses forward. To that end, SDi intends to release an updated version of our core market research report, the Global Assessment Report.
Although SDi’s Global Assessment Report, published in February, does contain some discussion of the effects of COVID-19 on the life science and analytical instrumentation industry, it’s fair to say that none of us had fully appreciated how the disease, then largely confined to China, would evolve to threaten the world and plunge economies into chaos. Although the report still retains incredible value as a benchmark for the base year of 2019, we realized that the forecasts had been relegated to obsolescence, having been overtaken by unforeseen events. A few months ago, we set in motion a plan to update these forecasts, and we expect the results to be completed and published next week. All clients who have already purchased the full version of the report earlier in the year will receive the update gratis. Market participants and watchers who have not yet purchased the report will now have a chance to do so with a fresh set of data, taking advantage of the adjustments we have made to our models to take into account the effects we’ve researched and quantified so far, including tracking laboratory closures over time, and how we see the market adapting and demand trajectories changing, in both positive and negative ways, over the next five years.
Although we have not yet compiled the complete final dataset, I can share some general results. For the instrument market, growth for 2020 will not just be less than originally forecast, but in fact total demand will decline for the year. This, however, masks some distinct variation across instrumentation categories. As noted above, the race to find better ways to detect and treat the disease are leading to rapid uptake of certain life science tools, as well as the automation and sample prep techniques required to make full use of them in the fight against the pandemic. In contrast, other areas of instrumentation are being severely impacted by the closure of laboratories, and the knock-on effects of the general lockdown, such as declines in oil prices and demand. These effects are most keenly felt in the market for initial systems. Even labs that have not shut down are more cautious about carrying out capital expenditures.
Looking further ahead, the forecast does call for a significant rebound in 2021 and beyond. The decline in 2020 will set such a low bar for many technology groups, that a return to something similar to normalcy will represent excellent growth in relative terms. Different regions will also experience quite different rebounds, as varying approaches to handling the crisis have met with greater or lesser success. A worrying rise in the prevalence of COVID-19 in developing nations like Brazil, Peru and Chile threatens the Latin American market. India, while it has relatively few cases on a per capita basis, has vaulted into fourth place in terms of overall cases, following the US, Brazil, and Russia. Of these four, Brazil and India are seeing the most rapid growth in cases at the moment, and neither shows signs of improvement, presaging a grim future given the large populations of these countries.
Stay safe and be well.