Survey & Construction Newsletter, Late October 2008

October 14, 2008  - By 0 Comments

Well, if the economy is going to tank …

… at least our industry outlook is pretty good for the next five years. Hmmm … I guess I should clarify, because the survey/construction business is clearly slowing here in the United States (I probably don’t need to tell you that). But, if you want to look at a bright spot through all of the gloom and doom of today’s global economy, the GNSS industry is looking really good for the next five years.

Ok, I first need to apologize in advance for the shameless self-promotion, kind of. I co-authored a market research report on high precision GNSS which we just completed. The report covers the period 2008-2012 and discusses market growth, technology, trends, etc. for only high-precision (10cm or less) GNSS. Not just receivers themselves, but associated services such as augmentation (RTK Networks), distribution (dealers) and others.

Just in the course of writing this column twice a month, I often find myself humbled when writing about GNSS issues. The “more I learn, the more I learn how little I know” cliché really applies here. Authoring the report was no different and perhaps even more challenging because of its 214-page length and breadth of topics covered. It really opens one’s eyes as to how far GNSS has weaved its way into our lives and, even more enlightening, how far it still has to go.

Another thought: I just received an email from the people upstairs asking for bullet points to take to the budget meetings in hammering out the 2009 GPS World magazine budget. I really started thinking to myself; GNSS is one of the few industries I can think of that, even in a horrible global economy, is still going to experience growth over the next five years. We are fortunate indeed. Seriously, think of the executive running Starbucks. Imagine their forecasts for 2009? The first place people will look is to save is that $4 per day.

Looking at the hard numbers, the global value of GNSS goods and services in 2008 will end up being approximately $3 billion (all figures are in U.S. dollars). It’s predicted that it will grow to $6 billion to $8 billion by 2012. $6 billion is realistic growth, assuming a global economic downturn and softening of some commodity prices, which is already happening. A particularly bright spot is the robust agriculture market, where there is renewed growth in precision agriculture for GNSS, primarily in high-end RTK applications.

Looking at the above graphic, the compound annual growth rate (CAGR) in a realistic or expected scenario is 19 percent, while the optimistic CAGR is 23 percent. A significant portion of that growth is driven by widespread adoption of GNSS as a productivity tool. GNSS is transforming from a niche tool used in niche industries to an essential productivity tool in global industry sectors such as mining, agriculture and construction.

Breaking the growth down further, the traditional GNSS markets you are familiar with will experience the slowest growth: 16 percent to 21 percent CAGR. That’s to be expected given the steady adoption rate over the last twenty years.

Machine control applications will experience a growth of 23 percent to 28 percent CAGR. This isn’t a big surprise, as you’ve probably experienced the adoption of this technology in your daily work if you haven’t been involved with it yourself.

The highest growth area will be precision GNSS data services with a CAGR of 33 percent to 38 percent. This includes the GNSS reference station infrastructure and wireless communications needed to deliver data services over a region, such as with RTK networks and RTK clusters. Technology innovation and development will enable precise positioning with less complexity and lower cost, thus encouraging adoption and stimulating growth.

The steady shift in user demographics, continued evolution of space-based systems and precise positioning techniques combined with the growth of dedicated precision GNSS infrastructure and associated services are a recipe for a dynamic and rapidly changing business environment.

So, if you’re looking for a bright light in the darkness of global financial instability, GNSS is one to talk about – and you’re right in the middle of it.

If you want to read more about the report, there’s a 20-page abstract you can download from GPS World’s site by clicking here. You’ll have to fill out a short form in order to download the PDF, but the price is right, as in free.

Back to the Subject of Solar Activity

This is one of the more humbling subjects I’ve written about. As I mention above, as much as I write and try to stay on top of subjects, I seem to be a step behind at times. Fortunately, readers offer their help in times of need.

John Sumption from Colorado commented on my last column regarding solar activity. He opined:

It’s well worth noting that Solar Cycle 24 has not lived up to any of its advanced billing. In fact, so far, it’s been quite a dud.

A maximum in 2011 is now virtually impossible. A maximum in 2012 is unlikely. The 11-year solar cycle usually comprises four years of rise time to maximum, and seven years of fall time to minimum. Solar Cycle 23 maximum was in 2000. It has already been eight years of fall time, and Solar Cycle 24 has so far been anemic at best. Yesterday and today a couple very small sunspecks appeared, too small and insignificant to be officially counted, and they have already faded to invisibility.

There is active discussion across the blogosphere about Solar Cycles 23 and 24 and the possible implications. The official NOAA/NASA panel predictions you mention are expected to be “updated annually” as they say on the website. In conjunction with a Space Weather Workshop in May, the panel simply reiterated its predictions, there being insufficient data on which to base a significant change.

As you know the panel originally issued a split decision; six of the panelists predicting larger than normal, six predicting smaller. The lack of Solar Cycle 24 activity continues to outpace the official predictions, and so far, even the six low-side forecasters seem to have overestimated Cycle 24.

An updated prediction from this group should not be expected before Spring 2009. However, theirs is not the only forecast. IPS, the Australian Space Weather Agency, recently acknowledged the lack of activity and pushed their forecast another six months down the road.

Jan Janssens maintains a table which contains most of the published predictions. Note that this table has not been updated in the past 12 months, as Solar Cycle 24 continues to behave unexpectedly, and forecasters have little or no additional insight on which to base new predictions.

You’ll see in the table, no. 8, by Maris et al, reasons that Solar Cycle 24 will be small, because of the loss of energy through intense solar flares during the declining phase of Cycle 23.

One of the most highly-experienced solar forecasters, Ken Schatten, has been wondering if the energy lost to the solar wind through low-latitude coronal holes – which are unusual at solar minimum – has left the sun with too little energy to produce more energetic spots.

Finally, an unpublished paper (but you can find it on the web) by Livingston and Penn of the Kitt Peak Observatory notes the trend of decreased contrast between sunspots and the sun, and that if the trend continues, sunspots would vanish entirely by 2015.

Now, you can choose to agree or disagree,  but I think John’s correct in that, so far, Solar Cycle 24 is not gearing up to be what pessimists (or optimists, depending on your attitude) that it might be. Further, he adds:

I also should have mentioned this – from a NASA media teleconference last week about the Ulysses solar probe mission. I think the results would tend to support Schatten’s idea of the sun having an energy “leak” somewhere.

Thanks for the insight and links, John.

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