Revenue is expected to jump 10.3% from 2010 to 2011 amid high maintenance demand following the tsunami
Los Angeles, California (PRWEB) October 27, 2011
The Nuclear Power Plant Construction industry will continue to grow over the next five years, albeit at a slower rate than the previous five years, according to a new report from IBISWorld, the nation’s largest publisher of industry research. Revenue is anticipated to expand 4.1% per year to $5.3 billion in the five years to 2016. Firms will increasingly focus their efforts on design and construction abroad, limiting revenue growth over the same period.
According to IBISWorld analyst, Justin Molavi, the Nuclear Power Plant Construction industry has grown during the past five years, with revenue expected to increase by 7.4% per year on average to $4.4 billion in the five years to 2011. “A rise in power uprates has underpinned this trend, as nuclear generators create more electricity and require more maintenance,” says Molavi. In doing so, industry players such as Westinghouse, The Shaw Group Inc. and Babcock & Wilcox have turned to maintenance work in the United States, since the last domestic nuclear facility was designed and constructed in 1996. The Japanese tsunami of 2011 also bumped industry revenue higher as heightened safety concerns prompted nuclear generators to expand their maintenance budgets. “Revenue is expected to jump 10.3% from 2010 to 2011 amid high maintenance demand following the tsunami,” says Molavi.
While a new reactor is expected to be built in the United States for the first time in more than a decade (i.e. the Watts Bar Unit 2 that is anticipated in 2012), most nuclear design and construction demand takes place abroad. Heavy regulatory hurdles have hampered the design and construction of new plants in the United States amid high terrorism concerns and perceived environmental issues. In turn, industry players concentrated their efforts on China and Europe, where the high rate of construction of nuclear facilities (in comparison to the low new nuclear construction rate in the United States) has provided a healthy source of revenue and opportunity.
The next five years will not be as favorable for the Nuclear Power Plant Construction industry as the past five years have been. Demand for design and construction services will likely slow down following the anticipated completion of the newest nuclear facility and the lack of new facilities planned over the next five years. Additionally, firms will continue to focus abroad for business as China and Europe continue building nuclear reactors at high rates. Despite this factor, industry players will still experience higher demand for nuclear facility maintenance as the industry's customers continue to use uprates to expand capacity amid high regulatory hurdles for new reactor construction. As a result, industry revenue is projected to slow to 4.1% average growth per year to $5.3 billion in the five years to 2016.
For more information, download the full report from IBISWorld on the Nuclear Power Plant Construction industry
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