The rail supply market will reach 211 billion euros by 2027

According to a new study, the global rail supply market is expected to grow by almost 20% over the next five years. The news would see the market’s volume accelerate past the €200 billion mark, as it recovers from the Covid-19 era.

The rail supply industry is a crucial element of industrial growth, employment and innovation. The sector includes the manufacture of locomotives and rolling stock, track, electrification, signaling and telecommunications equipment, parts and services. As the world seeks to upgrade its transport infrastructure and strengthen trade routes across the continent, the industry is facing increased demand.

The latest edition of the World Rail Market Study, carried out by the European Rail Supply Industry Association (UNIFE) and strategy consultancy Roland Berger shows that this will see the market recover quickly from a pandemic slowdown. The study covers the market development of 65 countries and revealed that due to the pandemic, the railway supply market between 2019 and 2021 moderately declined by 0.2% compared to 2017-2019.

This left its volume at 176.5 billion euros per year – even as considerable investment in rail infrastructure and control has been undertaken in the Asia-Pacific region – and in particular in China – as well as in Europe west, contributing to the distance of the world’s tracks from 39,000 kilometers to about 1.7 billion kilometers. However, researchers now predict a rapid rebound in the sector through 2027.

Over the next five years, the global global market for rail supply is expected to grow by 19.5% to reach a volume of 211 billion euros. According to UNIFE and Roland Berger, the driving force behind this could be the deployment of the European Rail Traffic Management System (ERTMS), communications-based train control (CBTC) and digital automatic coupling (DAC).

The study also highlighted the potential benefits of predictive maintenance, 5G applications, improved passenger information and ticketing solutions. And the European Green Deal is also likely to be an important driver of continued growth, as rail networks transition to net zero operations.

That’s not to say the rail supply market isn’t facing headwinds. According to UNIFE, one of the main areas for improvement is also to find a way to reduce barriers to market entry. Looking at the global situation, the organization suggested that only 61% of the global rail market is open to international rail providers – which the association says hampers the application of new innovative technologies and efforts to decarbonise transport.

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