Our exclusive survey of the global market for railway technology products, produced by SCI Verkehr, Germany, predicts annual growth of 3.3% between now and 2016 which will expand the market from €143bn

today to €168bn by 2016 and represents overall growth of 17%. However, most of the growth will be achieved in the after-sales market rather than through the purchase of new equipment where the market is expected to remain static largely to due to reduced demand in Europe and China.

While the Chinese market peaked at around €100bn in 2010, and dropped back last year to around €70bn, SCI forecasts steady investment of about €60bn for the next four years. For the first half of this year, investment was 36.6% lower than in the first half of 2011, but the government has just announced that it will increase railway investment to help boost economic growth. However, if China's Ministry of Railways wants to reach total investment of €60bn this year it will need to double the rate of spending during the second half.

The so-called Brics countries - Brazil, Russia, India, China and South Africa, together with other mineral-rich exporting countries such as Canada and Australia, are helping to keep the economic wheels turning. In South Africa, Transnet Freight Rail recorded a 10% increase in railfreight in the year to July 10 aided by strong growth in export coal and iron-ore traffic. This is helping to drive a massive $US 26bn investment programme in the railway - something which railway managers could have only dreamed of a couple of years ago.

The strong global demand for raw materials has encouraged major mining companies to invest heavily in developing new mines in several African countries resulting in the construction of heavy-haul railways. Indeed, heavy-haul railway construction is going through a mini boom around the world, with many projects either underway or planned.

Russian Railways (RZD) recorded a 3.4% increase in railfreight in the first seven months of this year, while passenger traffic was up 7.2% and passenger revenue grew by 4%. The increased revenue will enable operators to purchase new equipment, although SCI believes the market for freight wagons has probably peaked in Russia and the Commonwealth of Independent States (CIS) following large purchases in the last couple of years.

Nevertheless SCI forecasts solid growth of 3.2% for rail technology products which will increase the size of the CIS market from €18.1bn today to €21.3bn by 2016. Some of the growth is being fuelled by rail projects associated with the Sochi Winter Olympics in 2014 and the soccer World Cup which Russia will host in 2018.

SCI is forecasting 5% annual growth in the North American railway equipment market. This is not surprising considering the strong performance of the Class I railways. In the year to June 30 operating revenue increased by 9.6% to $US 69.6bn and net operating profit jumped by 16.36% to $US 12.3bn. This is particularly impressive given that freight traffic only increased by 0.6% to 2735 billion tonne-km.

Brazil is largely responsible for the predicted 5% annual growth in the South American equipment market. The decision to introduce open-access freight operators on key routes in Brazil should help to expand the market, coupled with continuing investment in urban rail schemes and the long-awaited Rio - São Paulo high-speed project.

SCI forecasts 10.6% annual growth in the €5.1bn Africa and Middle East market. This is well substantiated considering the heavy investment underway and planned in countries such as Saudi Arabia, the United Arab Emirates, Qatar, Morocco, and South Africa.

Finally, SCI expects the €39.7bn European railway equipment market to grow by 3% a year up to 2016. Obviously the rate of growth will vary dramatically across the continent, with the countries worst-affected by the eurozone crisis, such as Greece, Portugal, Ireland, Spain and Italy, either retrenching or at best stagnating. But elsewhere the outlook is a lot brighter. France and Britain, for example, are continuing to invest heavily in rail despite their high levels of national debt, and German Rail (DB) announced in March an ambitious €86bn investment programme up to 2020.

The financial results of some of Europe's leading railways are also encouraging, particularly for passenger traffic which is continuing to grow, partly due to the soaring cost of motoring. DB, which operates throughout Europe, recorded its highest ever six-month revenue figure in the first half of the year. While freight traffic is down, it is seeing growth in intermodal traffic, and expects to be only 1% down by the end of the year. DB's chief financial officer, Dr Richard Lutz, can see a "noticeable weakening in the economy" but he does not believe we are on the brink of a global recession.

So, while we are clearly going through a tough economic period, the railway sector is in pretty good shape and in a much stronger position than other industries. Steady growth of 3.3% in railway equipment over the next four years is very good news and far preferable to the roller coaster ride the global economy has endured for the last five years. The fact that the doors are about to open for the biggest-ever InnoTrans exhibition in Berlin must say something about this industry.