The contraction in the industry's performance corresponds with the sharp decline in demand for services in the depressed housing market.
(PRWEB) October 27, 2011
Over the next five years, a resurgence in home improvement spending and the value of total residential construction will support the Garage Door Installation industry's recovery, according to IBISWorld, the nation’s largest publisher of industry research. Furthermore, growth in the non-residential building market and increasing consumer sentiment will stimulate growth for operators. As a result, the Garage Door Installation industry's revenue is forecast to increase at an average annualized rate of 5.0% to reach $5.2 billion in 2016.
The Garage Door Installation industry's performance depends heavily on trends in home improvement spending, investment in residential building construction, and to a lesser extent, investment in the non-residential building market. Industry activity is heavily weighted towards the installation and maintenance of garage doors on existing residential buildings, which is estimated to contribute just over 75.0% of industry revenue in 2011. The installation of garage doors on new residential construction contributes about 10.0% of revenue, while garage door installation, maintenance and repair work on new and existing non-residential buildings contributes about 10.8% of revenue. Industry contractors compete for a share of the market against contractors from other skilled trades, such as general housing contractors and do-it-yourself property owners.
According to IBISWorld analyst, Josh McBee, revenue in the Garage Door Installation industry declined sharply during the late 2000s, falling at an average annual rate of 5.9% since 2006. “The contraction in the industry's performance corresponds with the sharp decline in demand for services in the depressed housing market," says McBee. “Further, the recession-induced downturn of investment into the non-residential building market and a 3.1% average annual drop in home improvement spending during the five years to 2011 also affected the industry. Revenue is expected to stabilize over 2011 and increase 1.4% to reach $4.1 billion.”
While the industry has begun to recover, margins contracted to about 18.1% of revenue in 2011, having fallen from 21.9% in 2006. The industry did not experience as severe deterioration in profit as many other specialty installation industries that rely heavily on the downstream building markets (e.g. carpenters and flooring installers). It declined at a lesser rate because of stable demand from necessary repair and replacement activity.
Home improvement spending is projected to increase at an average annual rate of 4.4% and investment into the housing and commercial building markets is anticipated to grow strongly over the next five years. As a result, industry revenue is set to rise at an average of 5.0% annually over the five years to 2016 to total $5.2 billion. Improved demand will also cause profit margins to rise; IBISWorld anticipates that profit will increase from 18.1% of industry revenue in 2011 to 20.6% in 2016.
For more information, download the full report from IBISWorld on the Garage Door Installation Industry
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