The number of companies manufacturing pumps has been exploding in recent years. According to a report on the pump market published by The McIlvaine Co., Northfield, Ill., there are over 10,000 pump manufacturers worldwide. Five of them hold 22% of the total market. These are ITT, Flowserve, Grundfos, Ebara, and KSB. The top 45 companies hold about 50% of the market. The vast majority of the remaining 9,000+ companies have sales of less than $1 million each.

The combination of increased competition and a weakened economy in the last couple of years has increased availability and trimmed demand. "Supply is not really an issue for buyers," admits Kip Robinson, marketing manager for Peerless Pump, Indianapolis, Ill. "Demand is low because of the economy. Overall, the market has not been strong recently. We aren't seeing a lot of activity in terms of new business." This bodes well for pricing, too, at least from the buyer's perspective. "In terms of pricing, most companies don't have the pricing leverage they once did, because pumps are becoming more of a commodity," continues Robinson. "There is a lot of competition out there."

While Len Petersen agrees that demand has been weak, he does see at least a sliver of light at the end of the tunnel. "It seems that the market has improved a bit recently, but not a lot," says Petersen, director of business development, commercial and industrial products, for Grundfos Pump Corp., Olathe, Kan.

"We held fairly strong through 2002," reports Gordon Durand, division manager for Haight Pumps, Evansville, Wis. "This year has been soft in certain regions, though. As a general comment, people are buying pumps to keep process lines running, rather than making comprehensive system up-grades or expansions."

In terms of the future, Durand notes that the pump industry tends to lag behind leading economic sectors. As such, while the economy may be picking up steam, he anticipates that the pump industry won't recover as quickly as some other segments of the economy. "There is a lot of project work being bid and quoted, but there's very little money available," he points out. "As such, I think business will be better in 2004, but not wonderful."

Certain industries, though, continue to maintain a solid demand for pumps, and, in some areas, demand is actually increasing, according to David Petina, an industry analyst with The Freedonia Group, Cleveland, Ohio. "Demand in the utility sector has been strong for over a year," he says. And recently, he adds, demand in the industrial sector, which has been lagging for the past year or so, has been starting to pick up again. "One sign is that capital expenditures have been up recently," he notes. In addition, with business being depressed, a lot of companies have made do by repairing, rather than replacing, pumps over the last couple of years. As the economy picks up, pump purchases should increase for two reasons. First, businesses will have a need for more pumps as demand for their products grows. Second, the older pumps they have been repairing will need to be replaced, unable to keep up with the ravages of time in addition to the increased demand. "In other words, customers will need the new pumps to get their product lines operating at full efficiency," explains Petina. "You can only fix things for so long."

As demand begins to increase in general, there is something else buyers should consider—demand from China.

The pump manufacturing industry is becoming more global every day, so it's easy to buy pumps anywhere at any time. As such, there shouldn't be any great constraint on supply, at least in the West. However, with demand increasing in places like China, supply could be stretched a bit. "There may be new pump demand because growth in China's power industry will exceed the entire existing demand in the United Kingdom," points out Bob McIlvaine, president of The McIlvaine Company. "That is, while new electricity demand for China was originally forecast at 30,000 megawatts, that forecast is now in excess of 50,000 megawatts of new demand, which is more power than is used in all of the UK." This obviously has implications for supply. Three years ago, if this demand had existed, it would have put a considerable strain on supply. "However, with demand being lower elsewhere in the world, China's demand is evening things out," he adds.

According to a research report published last year by The Freedonia Group, U.S. demand for fluid handling pumps is projected to increase 4.1% to $7.5 billion in 2005. Process manufacturing industries in general will remain the largest market for pump products. The chemical and pharmaceutical businesses will continue to comprise about one half of process industry demand. Increased demand is seen in specific for the chemical, food and beverage industries. Utilities are also expected to post healthy demand increases for pumps. Growth in shipments will mirror demand, advancing 4.1% annually to $8.2 billion in 2005.

The report adds that, despite an increasing number of foreign pump manufacturers, the U.S. is expected to remain a net exporter of pumps through at least 2005, although increases in imports will outpace growth in exports by a small margin.

The McIlvaine Co.'s June 2003 report (Pumps: World Markets), reports that worldwide sales of pumps are expected to grow from almost $29 billion in 2003 to just over $34 billion in 2007. This represents a downward revision from an earlier forecast by the company, which projected the $34 billion mark by 2006.

In looking for pumps, buyers should be aware of some new technologies. Example: "There have been advancements among manufacturers in making pumps more corrosion-resistant and more abrasion-resistant," says Freedonia's Petina.

Another advancement is in the area of metering pumps, where pumps monitor the amount of liquids passing through. "In many cases, these measurements must be extremely precise," notes Grundfos's Petersen. "Most operate with a solenoid that is difficult to set and does not always maintain its accuracy." However, Grundfos now has a new design that uses a synchronous motor and a stepper motor. Coupled with a computer chip board, the meter can maintain full accuracy.

Consider efficiency, too. For example, one manufacturer has recently come out with a pump that features a self-cleaning impeller. "Performance doesn't degrade over time, both in terms of maximum efficiency and reduced downtime," notes Petina.

Another example of efficiency: "We have been at the forefront of variable frequency drive technology," says Petersen. These involve variable speed motors. One new product, the Booster PaQ, is a multiple pump booster system, which, according to Petersen, has been in high demand this year. "Efficiencies are high," he explains. "The combination of variable speed and higher efficiency is very appealing to customers."

Smart pumps can also improve efficiency. A smart pump relays information about its performance, which allows operators to either change performance or schedule required maintenance on the pump to reduce the potential for unplanned shutdown. "Buying a smart pump can yield more in savings than the original cost of the pump," suggests McIlvaine.

"A remote control smart pump monitors its own performance," adds Petina. "This involves a microprocessor and software to provide process control. By being able to monitor pumps, you can throttle them higher or lower as needed, thus improving efficiency." He adds that this technology has been particularly popular in the oilfield segment of the economy. "Companies don't have to keep sending people out into the fields to monitor performance," he explains.

Peerless's Robinson adds: "We have remote sensing technology available, which eliminates the need for someone to stand guard over the pump."

In fact, according to many in the industry, energy efficiency should be the most important consideration when purchasing a pump. "These days, customers are looking more and more at the total life cycle cost," explains Petersen. He adds: "When you purchase a pump, about 8% of the total cost is the purchase price, 7% is the maintenance cost, and 85% is the cost of energy. If you save even 10% on the energy, this translates into about 8% savings, which means that you actually get the pump for free!" Years ago, he recalls, customers paid a lot of attention to energy savings. More recently, that interest waned. Now, according to Petersen, with corporations looking for ways to save as much money as possible, their interest in pump efficiency is being rekindled.

Robert Asdal, executive director of the Hydraulic Institute, Newark, N.J., echoes Peterson's emphasis on the importance of efficiency. "Unfortunately, the message about the importance of energy efficiency rarely gets to buyers," he admits. "They think they save $500 purchasing an inexpensive pump, but could end up losing $500 in energy costs the first month of operation."

The Hydraulic Institute recently published a report in conjunction with the U.S. Department of Energy, titled Pump Life Cycle Costs. An executive summary of the report is available free of charge at the Institute's Website (www.pumps.org). In addition, a book on the subject is for sale at the site.

In addition to buying efficiency rather than price, there are other things buyers can do to purchase pumps wisely.

• Visit suppliers' factories to see first-hand how pumps are manufactured.
• Look for suppliers that minimize leadtimes by employing modular design and production systems. Some suppliers say such systems enable them to deliver pumps in as little as seven days compared to the standard 4-6 week leadtime.
• Consider maintenance issues and involve plant maintenance people in evaluating things like pump reliability and projected repair and maintenance costs.

The very best way to purchase a pump is to look for one that will save money in energy costs and save time and money in maintenance costs. Two words should dictate pump purchases: efficiency and reliability. When you buy efficiency and reliability, the long-term cost of the pump can end up being zero. You can't go wrong with free pumps.