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Positive Outlook for Orthopedic Companies: Surge in Hospital Capital Spending and Market Share Gains Forecasted

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Zara Nwosu
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Positive Outlook for Orthopedic Companies: Surge in Hospital Capital Spending and Market Share Gains Forecasted

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The Positive Surge for Orthopedic Companies

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The latest survey results indicate a promising future for orthopedic companies, particularly for Stryker with its Mako robot set to drive significant share gains. Despite the prevailing concerns about hospitals deferring equipment purchases due to the uncertain macroeconomic environment, the survey suggests that growth in capital spending will slow down, but still remain substantially above pre-pandemic levels.

Increased Spending in Specific Areas

Hospitals are expected to boost spending on endoscopic cameras, operating room equipment, and procedural tools. This increase is mainly attributed to the hospitals' need to expand capacity for elective procedures that were postponed due to the COVID-19 pandemic. The Baird survey of 38 health system CFOs forecasts a 9% growth in capital spending in 2024, slowing from a 13% increase this year. Despite this, surgical robots, particularly those used in soft tissue and hip/knee procedures, are likely to see a decrease or stagnation in expenditure.

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Market Share Leaders and Growth Prospects

Mako, a market share leader in the orthopedic sector, is projected to further increase its gains over the next two years. Other companies such as Stryker, Johnson & Johnson, and Smith & Nephew are also expected to gain ground, potentially at the expense of Zimmer Biomet's Rosa. Most orthopedic categories are forecasted to see low-single-digit growth. However, interventional cardiovascular volumes are predicted to rise faster, indicating a positive trend in the sector despite analysts' caution about the overall prospects.

The Global Orthopedic Devices Market

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According to King's Research, the global orthopedic devices market revenue was recorded at USD 38.83 billion in 2022 and is estimated to grow to USD 53.33 billion by 2030, registering a 3.58% CAGR over the forecast period of 2023-2030. This market growth is primarily fueled by various factors including increasing prevalence of orthopedic diseases, a growing elderly population, and a rise in sports-related injuries requiring orthopedic procedures.

Regional Market Growth

The orthopedic device market size is set to grow by USD 12.11 billion from 2022 to 2027, progressing at a CAGR of 3.85% during the forecast period. North America is expected to account for 37% of this market growth. The growth of the regional market is driven by the high adoption of orthopedic devices and an increase in the number of surgical procedures.

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