The annual compound growth rate for medical equipment is estimated at 6.3%. In a medical market worth hundreds of billions of dollars, it creates a good opportunity for competition between manufacturers in the medical industry.
As the world's population grows, so does the medical equipment market. The annual compound growth rate (CAGR) for medical equipment is estimated at 4.5 to 6.3 percent. These numbers may not be large, but they are fixed, and in the medical market, which is worth hundreds of billions of dollars, it creates a good opportunity to compete between manufacturers in the medical industry.
On the other hand, the gray population (elderly population) has also increased. This increase in age is associated with an increase in chronic diseases, although the exact cause of these diseases is not known. Some of these diseases may be related to environmental factors and lifestyle, and some are due to old age. In any case, the main point is that there is a disease and it requires better tools for diagnosis and treatment.
Statistics from Lucintel state that the global medical device market will grow by four and a half percent over the next four years, and by 2023 investment in the sector will reach a total of $ 409.5 billion. Most of the focus of this investment will be on smaller devices and portable devices by the patient and the use of different software. Another report by Technavio predicts that CAGR in the medical equipment sector will grow by about 5% between 2018 and 2022.
The role of US investment in this capital market is currently 45%, followed by Europe, the Middle East and Africa (EMEA) and the Asia-Pacific region (APAC), respectively. Health care costs now make up 30 percent of the total.
Studies show that the Asia-Pacific region is likely to lead to the global economic growth of medical products; This increase is due to increased research and development costs by governments and private health companies. The number of hospitals in these areas is increasing and the need for medical equipment such as surgical instruments, wheelchairs, special hospital beds, walkers, monitoring and treatment equipment and other medical equipment will be increasing. More economic growth in the region will provide more funding for medical treatment and more opportunities for producers.
One of the characteristics of the medical products market is that the major suppliers of products are different in different categories. For example, in 2019, Switzerland, Germany and Belgium were the largest exporters of drugs worldwide, while the United States was the leader in exports of medical equipment and tools, and China was the largest exporter of personal protection products. The top five exporters of pharmaceuticals in 2019 were Germany ($ 98.4 billion), Switzerland, Ireland, the United States and the Netherlands. While in the field of medical instruments, medical equipment and diagnostic devices, the United States was the leader in exports in 2019 ($ 46.2 billion), followed by Germany, China, the Netherlands and Mexico. 2019 was the United States, which represents 19.7% of global imports. The highest annual growth in 2019 is in the import of medical devices and diagnostic devices to China. Goods including respirators (code HS 9019) as well as respirators and gas masks (code HS 9020) had a very high increase in Chinese imports (January-February 2020 / January-February 2019).
But all of these studies and predictions date back to before the Corona Pandemic. As a global catastrophe, Corona multiplied the demand for medical products. This increase in demand also affected the international trade flow of the medical industry. Between January and July 2020, global trade in medical products increased by 7.5 percent compared to the same period last year, especially by equipment such as masks, alcoholic and non-alcoholic disinfectants, by 36 percent, and medicines by 6 percent. The impact of these developments on the trade balance of the world's major economies was very uneven. In the case of China, for example, the balance rose from $ 0.8 billion to $ 36 billion. This change is actually a 64% growth. While the economic balance of medical products in the United States fell by about 20 percent and in the European Union by 10.5 percent.
Finally, it should be noted that, even in one group of medical products, no country is completely self-sufficient. In fact, the countries that are the largest exporters of a particular type of product are often the largest importers of another product. Sometimes, even in the case of a pandemic like Covid 19, a country that is a leading exporter of a product needs to import the same product. In short, the demand for medical products has increased significantly internationally in recent months due to the Corona pandemic. But this increase was not in a specific region or a specific product. From the point of view of economic policy, there is the fact that the export and import of medical products are interdependent. By coordinating them, restrictions can be placed on a particular area.