Air and Gas Compressors

Industry Snapshot

Although air and gas compressors are vital to scores of commercial and industrial products and activities, compressor manufacturing is a small and mature industry within the industrial machinery sector. Products from this industry are used in the chemical industry, steel mills and blast furnaces, energy-related extraction industries, pipelines and well drilling, and general construction. Despite slow and often cyclical business, several of the industry's top producers have managed to turn a healthy profit, especially on newer technology and aftermarket parts.

In 2007, about 342 U.S. companies manufactured air and gas compressors and related devices. They employed 24,560 workers, an increase from the previous year, which employed 22,080 people, including 13,420 production workers who had a payroll of more than $560 million. The vast majority of air compressor makers operated small facilities with less than 100 employees, and 75 percent of establishments employed less than 10 people, but a relatively low number of large facilities supplied the lion's share of output.

Organization and Structure

Historically, manufacturing in this industry has been heavily concentrated. In 1977, more than half the industry's employees worked in the four largest facilities, and 79 percent of all facilities employed less than 100 workers. By 1992, diffusion was evident in the large firms, although 79 percent of all facilities still employed fewer than 100 workers. The 56 firms that had more than 100 employees accounted for 81 percent of all workers.

The use of compressed air and gas can be divided into three major categories, according to the Compressed Air and Gas Handbook: compressed air and gas for process services, compressed air for power, and compressed air for general industrial applications.

Process services include chemical alterations like combustion, nitrogen fixation, polymerization, hydrogenation, and alkylation, and change of state operations like quenching, drying, and atomization. Products that result from these types of procedures include liquid fuels, plastics, synthetic rubber, ammonia, and fertilizers.

Power uses utilize the potential energy of stored compressed air to directly perform work. The tools and devices powered by compressed air are termed pneumatic. They generally perform more slowly than electric tools but are faster than hydraulic and provide smooth power application. The energy potential can be translated into rotation and torque with the use of rotary air motors, vanes, or air turbines. Reciprocating motion and direct force provide easily controllable presses, clamps, and feeding devices. Air pressure can be used to accelerate a mass such as a pile driver or pavement breaker. Blowguns use the air pressure stream directly to move materials such as chips, debris, and paint. Air can displace fluids, semi-fluids, and solids to drive materials through pipelines. When air and liquid are mixed, the resulting bubbling action provides agitation, mixing, and aeration.

Industrial uses of compressed air include plant maintenance and the powering of pneumatic tools for production line work. This is especially important for automation of thread-tightening, pressing, hammering, feeding, positioning, and safety-control sensors.

Background and Development

The world's first pump was probably the force or air pump built by Ktesibios of Alexandria about 270 B.C. He used a cylinder and plunger arrangement to pump air through pipes of various lengths, creating the first water organ. The water was used to maintain a steady air pressure in the system. Simple air pumps and bellows provided low-pressure compressed air for devices such as organs and blacksmith furnaces, but major advances in compressor technology did not develop until the Industrial Revolution.

Generally, the term compressor was applied to any blower that produced compressed air in excess of 40 psi (pounds per square inch). Below that pressure, the device is simply called a blower or industrial fan. New demands for flexibility of power sources came with new industrial processes. Coupling the air pump to a steam engine demonstrated the potential of air power. By 1900, the stationary air compressor was a common tool for industry, albeit a massive one requiring bulky, space-consuming foundations. In 1900 the portable compressor made its debut by the simple expedient of placing wheels under some of the smaller stationary engines. Until 1910, the most common power for such compressors was the steam engine or an oil engine. The main application for the devices was for rock drilling. The invention of a lightweight air drill spurred development of the portable compressor.

Major advances came in the 1930s, when the two-stage, air-cooled compressor appeared, followed by multi-speed regulation by the end of the decade. The rotary screw compressor was introduced in the 1950s in the United States, allowing considerably higher operating speeds in smaller, lighter units. Truck mounted diesel-powered units used by utilities and construction companies as completely portable and flexible power sources were made possible by continual improvements.

One industry that especially benefited from the new technology was oil exploration and drilling. In 1938 some oil companies began experimenting with air-powered drills. The technique used a rotating bit and pumped either mud or air through holes in the bit to clear the cutting face. New booster compressors producing 1,500 psi were developed specifically for the industry. By the end of World War II, portable drilling rigs were quickly and efficiently boring shallow wells.

The construction industry borrowed the technology for its blast-hole drillers in 1946. In 1954 it developed its own bottom-hole tool, which used 100 psi compressed air to rotate a carbide-tipped tool. Water-well drills used 250 psi air to clear water from the hole while drilling.

Positive-displacement and velocity or dynamic compressors are the two most common compressors. Positive-displacement machines trap air in a confined space and then reduce the volume of that space to increase the pressure. The bicycle pump is a familiar example of this type of compressor. It does not need a piston assembly, a rotating gear, or a screw mechanism. Such compressors can be powered by electric motors, oil or gas engines, and steam engines or turbines. The most common applications for these compressors are off-shore oil drilling, construction applications, locomotives, ships, mining, and smaller units in machine shops, bakeries, dry cleaning plants, food processing plants, furniture factories, printing plants, textile mills, automotive service shops, and other industrial and commercial applications using compressed air.

The dynamic system uses a fan or turbine mechanism to force the air or gas against the casing by centrifugal force. Such systems often use several stages or series of compression to achieve high pressures. The systems can be either axial, expelling gas along the line of its impeller axis, or radial, expelling gas against the casing by centrifugal force. The most common applications for these devices are in refineries, petrochemical plants, steel mills, ammonia plants, sewage aeration, pipeline boosters, wind tunnels, and supercharging diesel engines.

By the early 1980s, the chemical industry had become one of the largest users of compressors. According to the Monthly Labor Review, in 1982 the chemical industry used about 10 percent of the compressor industry's output. In comparison, steel mills and blast furnaces took about 7 percent of output. The oil-well and pipeline industries purchased 18 percent of output. Demand in this sector dropped dramatically in the 1960s but steadily recovered. Compressors are used in both oil drilling and oil field maintenance operations, particularly for secondary recovery efforts. Construction took 18 percent of output. Particularly important in this category were the sales of portable compressors used to drive pneumatic tools on the construction site where other sources of energy might be restricted.

The general industrial slowdown of the 1980s hit the compressor industry hard. Major clients like the nuclear power industry, oil well and pipeline industry, and the construction industry cut back on orders for new equipment and left existing components idle. A strong U.S. dollar made U.S. products noncompetitive in foreign markets.

By 1988, this started to change as a weakening dollar spurred exports and a general increase in the manufacturing climate sparked new domestic orders in almost all sectors. The industry continued to modernize production by consolidating facilities and adopting sophisticated CAD/CAM systems and metalworking and casting technologies. New materials and designs were explored to extend the life of components in corrosive environments and to increase reliability.

Market conditions for compressors and related equipment vary widely by application and region, but in general the industry struggled with limited growth opportunities. In the late 1990s, most domestic and foreign markets were tough, characterized by slack demand and rising international competition. For much of the 1990s, the oil and natural gas markets were especially disappointing, as low oil prices made energy companies leery of investing in new equipment. Indeed, for many compressor makers, selling aftermarket parts and accessories became significantly more profitable than selling new compressors. Some industry firms also attempted to cope with sluggish growth by developing economies of scope, such as offering leasing and maintenance services for compressor equipment.

Portable air compressors that have wheels and can be moved from site to site are one of the industry's fastest-growing lines. According to the U.S. Census Bureau, in the late 1990s, the U.S. industry shipped about 2.99 million compressors. Almost three-quarters of these, 2.2 million, were portable models. Up to 90 percent of portable units were sold to equipment rental services.

Current Conditions

The general manufacturing slump of the early years of the first decade of the 2000s also affected the air and gas compressor industry. The value of industry shipments fell from $5.65 billion in 1997 to $4.82 billion in 2002. Over this time, the cost of materials declined $3.07 billion to $2.74 billion, while employment likewise dropped from 24,582 to 19,708 workers.

By 2003, the industry was rebounding along with the manufacturing sector as a whole. Industry shipments were $8.5 billion in 2006 and rose to $9.7 billion the next year. In the mid-years of the first decade of the 2000s, some of the innovations for the industry were solar-powered compressors, quieter and oil-less models, and high-efficiency designs.

Industry Leaders

Dresser-Rand Group Inc. has long been one of the top U.S. air-compressor manufacturers since the days when it was a subsidiary of Ingersoll-Rand. By some estimates, it was the largest producer in the United States and second largest producer in the world. In 1998, its Air and Temperature Control division, which made air compressors and refrigeration equipment, recorded sales of $2.2 billion. With profit margins above 10 percent, the compressor line was considered one of Ingersoll's stronger segments. In 2006, Dresser-Rand had sales of more than $1.5 billion, increasing to $2.2 billion with 6,400 employees. Based in Houston, Texas, the firm brought in a substantial amount of its sales from overseas and thus is particularly sensitive to international economic conditions.

Another important player, Thomas Industries Inc. of Louisville, Kentucky, made small custom compressors and vacuum pumps as components for other devices, including printing equipment, vending machines, transportation equipment, and medical and laboratory equipment. Medical applications like oxygen concentrators represented more than one-third of Thomas's $177 million in 1998 sales, which rose to $410.1 million in 2004. Like Dresser-Rand, Thomas Industries also depended heavily on international sales, which made up as much as 40 percent of its revenue in the late 1990s.

Workforce

Industrial machinery industries employ a high proportion of skilled trades with about 30 percent of all production workers compared to 26 percent in manufacturing in general. Metalworking craftsmen and machinists are three times more common in this industry than in manufacturing as a whole, while laborers are half as common. The industry also employs a high proportion of non-production workers, indicating a reliance on mechanical engineers. More than 40 percent of the compressor industry's workforce is located in New York, Ohio, Pennsylvania, and Texas.

America and the World

The United States had typically incurred a deficit in compressor trade with other nations. In 1997, U.S. firms imported $683 million in compressors and vacuum pumps, while exports trailed at $309 million. In 2000, the global market was estimated to be between $10 and $12 billion. However, by 2008, the U.S. showed a trade surplus, importing $2.4 billion in products from 80 countries while exporting $3.6 billion to 178 countries.

Nevertheless, these numbers do not reflect the global character of many of the industry's leading companies. They have plants and offices around the world and increasingly look for opportunities outside the overfed markets of the United States and Europe.

Sweden's Atlas Copco AB is a case in point. The world's largest compressor maker, with an estimated 20 percent share, Atlas Copco manufactures compressor gear in seven countries, including the United States. It has separate assembly plants in seven countries as well. Perhaps most notable, though, is that Atlas Copco decided in the late 1990s to stop making many of its own components and instead began to import them from less expensive competitors in developing economies. By the mid-years of the first decade of the 2000s, Atlas was reportedly behind half of all compressor imports into the United States and reported 2006 sales of more than $7 billion, increasing further to just under $9.9 billion by 2008 with a workforce numbering 24,378.

Research and Technology

The majority of compressors manufactured are custom made to a client's specific requirements for use in complex applications where the failure of the compressor could be disastrous. Consequently, manufacturing innovation stresses flexibility and reliability. As in many traditional manufacturing fields, emphasis has been on efficient, short-run, just-in-time manufacturing processes that allow rapid customization for changing market needs.

New corrosion resistant materials were developed and refinements to old processes were adopted. Specially designed metal-forming machines were created for the industry, including combination milling, radial drilling, and facing machines; variable setting grinders that automatically form tapered shafts; and automatic tool changing devices controlled by NC tapes or computer software. Foundry operations for production of compressor casings and core making advanced with rapid-cycle machinery, synchronous fabricating machinery, and a no-bake molding process using a resin binder and catalyst. Closer tolerances were achieved in components by replacing wooden molds and cores with ceramic. Increasing concern over energy efficiency dictated more advanced compressor designs with larger displacements.