According to the latest forecast published by the McIlvaine Company in N028 Industrial Valves: World Market, the market for industrial valves will grow by 16% from 2015 to 2019 at oil prices of $80/barrel during the period. At $40/barrel, the growth will only by 9%.
There are a number of variables which will determine the market growth for valves. New insights are continually generated which justify changes in the forecasts. The Iran nuclear agreement is just one example. The plunging economy in China is another. However, the most significant development recently is the plunge in oil prices to $40/barrel.
The industrial valve market is led by oil and gas which represents 15% of the present market. McIlvaine assesses the likely changes in oil prices based on the following factors: the break-even cost for a new well; new technology developments; demand; supply; political developments; regulatory initiatives and traumatic events. Some of these developments are more predictable than others. The low oil prices lead to lower extraction activity which eventually leads to shortages and higher prices. On the other hand, wars, oil spills and earthquakes cannot be easily predicted. As a result, there will be the need for continuous changes in the forecasts to take into account the surprises.