By specializing in petroleum production and transmission specialty valve manufacturing, the U.S. has significantly increased exports to oil-producing nations, such as Saudi Arabia and the United Arab Emirates.
Los Angeles, California (PRWEB) January 10, 2012
The US recession highlighted the strong interdependence between the Valve Manufacturing industry and the health of industrial manufacturing markets. During the five years to 2011, industry revenue is estimated to have declined at an average annualized rate of 1.9%. Conditions rebounded in 2011, with expected revenue growth of 2.3% to $26.7 billion.
According to IBISWorld industry analyst Nima Samadi “valve manufacturers rely on several key industries to buy their products, including chemical, petrochemical and petroleum-related industries; water and waste systems; power generation and utilities; and construction. Chemical and petrochemical manufacturers faced declining demand due to increased import competition and lower demand from downstream industries; however, conditions improved in 2010 and 2011.” For petroleum production and pipeline transmission industries, record oil prices between 2006 and 2008 stimulated the growth of drilling and transmission operations globally as these industries expanded their capacity. Still, the subsequent decline in the price of oil dramatically reduced segment revenue, resulting in a fall in demand for petroleum production and transmission-related valves. With oil prices surging again in 2011, demand from petroleum customers spiked again. Some segments have performed well throughout the recession, though, with stimulus funds and demand from the maintenance and repair of existing piping allowing the water and wastewater systems segment to grow.
“Many industrial and fluid power valves have become standardized, causing pricing to become the primary basis of competition” added Samadi. “This development favors foreign manufacturers; as a result, imported goods satisfy an increasing amount of the domestic market. Industry imports are expected to have grown at a marginal annual rate of 0.2% in the five years to 2011 due to recession-related declines. As globalization increases, foreign imports will threaten the viability of domestic manufacturing.” By specializing in petroleum production and transmission specialty valve manufacturing, the United States has more than doubled its exports to oil-producing nations, such as Saudi Arabia and the United Arab Emirates, during the period. As downstream industries recover from the recession, demand is set to increase.
Samadi believes that the Valve Manufacturing industry consists of a large number of small firms. “The top four firms account for less than 30.0% of total revenue. Overall concentration has been increasing. Over the past five years, many small and medium-size firms have exited the industry, while some larger players have engaged in major merger and acquisition activity. Larger firms also continue to grow by increasing their presence in global markets, mitigating losses or downturns in revenue generated by the deterioration of the domestic markets.” Industry major players are Emerson Electric and Tyco International. Just below the 5% threshold IBISWorld uses as it major player cut off is Cameron International; smaller companies include McWane Inc and Meggitt PLC.
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This industry manufactures a variety of industrial and fluid power valves, hose fittings and the associated trimmings. Additional products include metal and plastic plumbing fixtures, such as faucets, flush valves and showerheads.
Valve Manufacturing industry Report Key Topics
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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