Market Definition
Testing, Inspection, and Certification (TIC) refers to the sector that provides third-party inspection of services, products, and processes across Europe. The TIC companies offer an unbiased evaluation of products or services to industries such as automotive, construction, energy, etc., to make sure that they comply with the regulations, standards, and benchmarks of government entities & other international organizations.
Market Insights
The Europe Testing, Inspection & Certification market is projected to grow at a CAGR of around 4.5% during the forecast period, i.e., 2023-28. The demand for these inspection services in Europe has steadily increased due to the growing volume of imports & export in various industries, such as electronics, automotive, etc., for regulatory mandates & to maintain effective quality & safety standards.In addition, the significant requirement for these services from sectors like oil & natural gas, chemical, power, and others, has also played a major role in the market expansion. The oil & gas industry in the region has matured, and there has been a blooming emphasis on ensuring the safety & reliability of equipment and infrastructure, which has driven the adoption of TIC services in the country.
| Report Coverage | Details |
|---|---|
| Study Period | Historical Data: 2018-21 |
| Base Year: 2022 | |
| Forecast Period: 2023-28 | |
| CAGR (2023-2028) | 4.5% |
| Country Covered | The UK, Germany, France, Spain, Italy, Rest of the Europe |
| Key Companies Profiled | SGS Group, Bureau Veritas, Intertek, Dekra, Eurofins Scientific, TUV SUD, DNV GL, TUV Rheinland, Applus+, TUV Nord, Others |
| Unit Denominations | USD Million/Billion |
Additionally, there are several new oil & gas initiatives, including the Wisting Central Oil Discovery Project & Aphrodite Gas Field Project in the region that would upscale the demand for these services. Along with this, Europe is the second largest chemical producer in the world & has the presence of chemical companies like BASF, Bayer AG, and Royal Dutch Shell, among others, owing to which the total sales value of chemicals was almost USD900 billion in 2021.
European countries such as Germany, France, Italy, and the Netherlands have emerged as primary chemical production hubs. According to the European Chemical Industry Council, in 2021, these four countries accounted for nearly 66.2% of the EU’s chemical sales. The plants of chemical manufacturing companies have a large number of industrial assets, such as pressure vessels, piping systems, electrical & instrumental systems, etc., that need these services to comply with the regulatory norms, further continuing to support the market growth in the coming years.
Furthermore, in 2023 the European Parliament approved a law to effectively ban the sale of new petrol & diesel cars in the European Union from 2035, aiming to speed up the adoption of electric vehicles & combat climate change. Owing to this, Europe is planning to develop its lithium mining industry to supplement the demand for lithium for EV battery manufacturing. As a result, lithium mining projects are surging in the region, especially in countries like Portugal, Germany, France, etc. Therefore, with the rise in European mining companies, the need for effective Testing, Inspection & Certification services would also surge, thus influencing the market in the forthcoming years.
Market Dynamics
Key Driver: High Product Recalls to Augment the Market Expansion
The product recall activities across major markets, like automotive, pharmaceutical, etc., have enriched during 2018-22. As per Sedgwick’s European State of the Nation Recall Index report 2023, around 10,545 product recalls in 2022, a 4.3% increase over 2021. Owing to this, companies across various sectors, such as consumer products, electronics, and several others, highly relied on TIC services for validating product quality & making sure that they comply with regulatory standards, thereby avoiding recalls.
Furthermore, among various markets, toys, clothing, and electronics witnessed comparatively large recalls than others. As per industry experts, the recalls in the electronics sector are mainly due to surging technological innovation, because of which unforeseen issues are coming up in electronic products, owing to which the demand for these testing services is prevailing & would continue to expand in the following years.
Possible Restraint: Lack of Skilled Workforce to Hamper the Progression
As industries across various verticals are growing in Europe, the demand for TIC services is also increasing. However, the market is witnessing a shortage of skilled workforce, which, in turn, is hindering growth. Moreover, the dearth of skilled workforce is leading to the delay in the delivery of services, due to which the cost of operations is increasing for the service providers.
Furthermore, all the major sectors, like automotive, electronics, medical devices, etc., are undergoing thorough technological upgrades, thus resulting in soaring need for highly skilled professionals to inspect these upgraded products. Consequently, it would pose a challenge for the market players to evaluate these new services & products without the availability of a skilled workforce, further impeding the market expansion.
Growth Opportunity: Expansion of Renewable Energy Projects in the Europe to Open New Doors to the Market Players
European countries are planning to cut power sector emissions & aim to reach the EU's ambitious target of climate neutrality by 2050. As a result, wind & solar power projects are receiving more funding in the countries like Sweden, Denmark, etc. Owing to this, many new renewable projects, such as Thor Offshore Wind Farm (Denmark), Agrosolar Kula Solar Power Plant (Serbia), Cottam Solar Power Plant (The UK & Ireland), and several others, are commencing in the region. The government & other regulatory bodies in the region make it compulsory for these projects to undergo testing & inspection. Thus, the growth in renewable energy projects would open up new avenues for the market in the region during the forecast period.
Key Trend: Integration of AI in Testing & Inspection Applications
AI is now being increasingly integrated into the testing & inspection process to automate the services & reduce the time & cost of manual testing & inspection. Moreover, the testing services integrated with AI-based systems are more capable of detecting defects in products, equipment, and process, which simultaneously reduces maintenance & downtime. Owing to these benefits, companies, like super.AI, Applus+, etc., have integrated AI applications into their testing, inspections, and certifications services. Furthermore, by the automation of these services using AI, the time & cost associated with it can be reduced, due to which market players would continue to integrate AI into their services in the following years.
Market Segmentation
Based on Sourcing Type:
The requirement for Outsourced TIC services was significantly higher in the region. This demand was driven by the need for quality compliance by large corporations & government authorities, particularly in sectors, such as consumer goods & automotive. Outsourcing these services allows companies to focus more on core competencies while leaving the compliance & quality assurance tasks to experienced third-party providers. Furthermore, outsourcing service provides a level of neutrality & unbiasedness, which is a bit difficult in in-house services. Moreover, the growing global trade, coupled with stringent European Commission regulations regarding quality assurance, is anticipated to propel the demand during 2023-28.
Based on End User:
Of them all, Consumer Goods & Retail have a substantially higher demand for TIC services as this industry in Europe is highly regulated & has to comply with safety, health, and environmental regulations. These services help consumer goods manufacturers to reduce the risk of consumer goods recalls & reputational damage. According to data released by the EU’s Safety Gate in 2021, consumer goods such as electric appliances & equipment were among the most frequently recalled product categories.
Furthermore, e-commerce is rapidly growing in the region due to soaring internet penetration & smartphone adoption. Hence, this rise of e-commerce is enhancing the need for testing services as consumer goods manufacturers need to differentiate themselves from their competitors by demonstrating the quality & safety of their products to gain customer trust & loyalty.
Regional Projection
Geographically, the market expands across:
Of all the countries across the region, Germany has registered the highest demand for TIC services due to the presence of a well-established automotive sector. This sector has a high requirement for these services to comply with stringent regulations & meet desired quality standards. Moreover, the country’s automotive sector is the most innovative industry in the region, accounting for around 34.1% of total German industry R&D expenditure of nearly USD79.52 billion in 2020, as per GTAI (Germany Trade and Invest) report.
The high level of innovation & advanced technology requires a complex & sophisticated supply chain & to ensure that all components & materials acquired through the supply chain meet the necessary standards, due to which these services are essential. Furthermore, the automotive sector in the country has supplemented its focus on electric vehicles, owing to which the demand for these services is anticipated to surge further.
Recent Developments by the Leading Companies
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Frequently Asked Questions
A. The Europe Testing, Inspection & Certification Market would showcase a CAGR of around 4.5% during 2023-28.
A. High product recall in Europe to boost the market growth in the coming years.
A. SGS Group, Bureau Veritas, Intertek, Dekra, Eurofins Scientific, TUV SUD, DNV GL, TUV Rheinland, Applus+, TUV Nord, etc.
A. Outsourced Sourcing have acquired the major share in the market.
A. Germany would present growth prospects in the Europe Testing, Inspection & Certification Market during 2023-28
A. Integration of AI for testing & inspection is a shaping the growth of the Europe Testing, Inspection & Certification Market
A. Consumer good & retail sector, automotive sector, food & agriculture sector, industrial & manufacturing sector, energy & power sector, chemicals, construction & infrastructure sector, etc., are some potential end-users.
A. Expansion of renewable energy projects in the Europe to open new doors for the market players.
