Testing, Inspection, And Certification - Market Share Analysis, Industry Trends & Statistics, Growth Forecasts (2024 - 2029)

Key Highlights

• The Testing, Inspection, and Certification (TIC) services are essential in providing conformity assessment services, including testing, validation, and declarations of conformity. These services, mandated by regulations or embraced as best practices, safeguard individuals and the environment. The services within the TIC sector span quality and safety controls, covering supply chains, industrial sites, product testing, management systems, car inspections, pre-shipment evaluations, and more.
• The market's growth is propelled by factors like heightened safety and quality awareness, stringent government mandates, globalization, the push for product differentiation, and the pursuit of a competitive edge.
• The automotive industry, primarily focused on electric vehicles (EVs), is currently the most prominent sector, leading to a rise in demand for electrical products and components. Moreover, sensor adoption is significantly increasing, particularly in the automotive industry. This surge in demand is expected to persist at elevated levels in the coming years, supported by other markets as well. Government efforts, such as offering subsidies and striving to achieve carbon emission goals, are anticipated to boost investments in the region's EV sector, consequently expanding growth prospects for the market.
• Globalization of trade leads to a complex supply chain that can impact product quality. Therefore, TIC services are required at every stage of the supply chain to maintain the same. Due to rapid globalization, privatization of state-owned laboratories, and increasing standards of end-user efficiency, complex supply chains have posed major challenges to the TIC market.
• In the current scenario, the macroeconomic situation remains volatile, and players continue to see macro trends such as high interest rates, inflation, fear of recession, and geopolitical tensions increasing in some parts of the world, which can impact industrial activities in the future and the demand for products in the TIC market. Additionally, in April 2024, UN Trade and Development (UNCTAD) forecast global economic growth to slow down to 2.6%, marginally above the 2.5% threshold commonly associated with a recession, which would lower the market growth.

Testing, Inspection, and Certification Market Trends

Energy and Chemicals to be the Largest End-user Vertical

• Safety is paramount in the energy and chemicals segment due to its potential hazards. TIC services help verify compliance with safety regulations and industry standards. For instance, in the chemical industry, TIC ensures the integrity of pipelines, storage tanks, and drilling equipment, minimizing the risk of accidents. TIC helps evaluate the safety of manufacturing processes and handling hazardous substances.
• TIC services are essential in maintaining product quality across the energy and chemicals segment. Through rigorous testing, inspection, and certification, TIC ensures that products meet the required standards. In the renewable energy sector, TIC verifies the performance and durability of solar panels, wind turbines, and energy storage systems. TIC helps assess purity, composition, and adherence to quality specifications for chemical products.
• Sustainability and environmental responsibility have become critical energy and chemical considerations. TIC services aid in assessing and minimizing the environmental impact of operations. Environmental testing helps identify pollutants and monitor air, water, and soil quality. TIC also supports compliance with environmental regulations, such as emissions control and waste management.
• The increasing demand for electricity is anticipated to offer lucrative opportunities for the market's growth. According to Exxon Mobil, worldwide electricity demand amounted to over 22 petawatt hours in 2017. By 2040, global electricity demand is expected to reach approximately 35.3 petawatt hours. Moreover, according to EIA, electricity generated worldwide is projected to rise by 70% in the coming three decades to reach some 42 thousand terawatt-hours by 2050. That year, renewables are anticipated to be the significant source of global electricity, accounting for some 56% of the electric power produced.
• The renewable energy sector is experiencing growth and expansion globally. This growth is driven by various factors, including the need to strengthen energy security, reduce reliance on fossil fuels, combat climate change, and create economic opportunities. The growing emphasis on renewable energy sources, such as solar, wind, etc., has increased demand for cable conduits and protection systems to ensure the safe and efficient transmission of electricity generated from renewable sources. According to BP, global energy consumption has increased dramatically in recent years and is projected to continue to increase. By 2050, renewable energy consumption is expected to increase and will reach about 247 exajoules.
• Coal is a widely used fuel for power generation in many countries. According to the Energy Information Administration (EIA), the installed coal power generation capacity has increased worldwide, almost doubling between 2005 and 2022, when it amounted to roughly 2.27 terawatts. The global coal power generation capacity is expected to remain relatively stable and reach 2.28 terawatts by 2050.

Asia Pacific to Register Major Growth

• China is significantly investing in the market's growth. The country has become an attractive spot through developing indigenous industries and subsequent acceleration in exports, the introduction of stringent standards, and rapid urbanization, which creates various opportunities for the TIC in the country.
• China's "Made in China 2025" initiative has identified 5G as an emerging industry. It offers opportunities for Chinese enterprises to become more competitive and innovative in the international market and prevent low-quality and counterfeit goods from entering the market, which can be achieved through domain-specific certifications.
• Apart from having a large consumer base, the country is among the leading exporters of agricultural and food products. As the exported products must fulfill international regulatory guidelines and industry standards, the expanding export market is expected to positively impact the demand for TIC services.
• The Japanese government actively promotes the electric vehicle (EV) sector by offering research and development grants, tax incentives for charging infrastructure, and subsidies for EV purchases. According to AIRIA (Japan), the number of battery-electric passenger cars on the road reached approximately 162.4 thousand by March 2023, up from around 138.3 thousand in the previous year. Projections indicate that by 2032, BEVs will dominate the market with a 37.8% revenue share, with passenger cars leading the sales due to efforts by original equipment manufacturers (OEMs) and government backing.
• Various developments in the power and energy sector are expected to create opportunities for the market studied. For instance, in April 2024, GE Vernova's Gas Power business announced it had secured an order from Korea Western Power Co. Ltd (KOWEPO), a subsidiary of Korea Electric Power Corporation (KEPCO), to provide a GE Vernova7HA.02 gas turbine and a H65 generator for KOWEPO's power station in Gongju-si, Chungcheongnam-do Republic of Korea.

Testing, Inspection, and Certification Industry Overview

• March 2024 - Intertek Group PLC partnered with Hicomply, an information security management software (ISMS) platform provider, to simplify clients' compliance procedures and prepare them for certification. The collaboration aimed to assist businesses in cost-effectively adhering to globally recognized information security standards. Intertek specializes in ISO/IEC 27001 Information Security Management Systems Certification, empowering organizations to tackle information security and cybersecurity risks proactively. Through the partnership with Hicomply, customers gain access to the company's unique ATIC advantage, enabling them to trim costs and expedite their journey toward ISO 27001 certification.
• March 2024 - SGS expanded its fire safety, resistance, and flammability testing services at its Farmingdale, New York laboratory. The company secured approval from the US Coast Guard (USCG) for an enhanced suite of testing solutions tailored for the maritime sector. This expansion aligns with SGS' commitment to maintaining services under its ISO/IEC 17025:2017 accreditation. Furthermore, SGS offers accredited testing services across various sectors, including aviation, automotive, building materials, furnishings, carpets, textiles, and wire and cables.

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