Larger firms have continued to grow in global markets, which have mitigated losses generated by the deterioration of the domestic market
Los Angeles, California (PRWEB) January 12, 2012
The US recession has highlighted the strong interdependence between the Shell and Tube Heat Exchanger Manufacturing industry and the health of industrial manufacturing markets. The effect of the recession became clear over the course of 2009, as revenue and demand fell suddenly. According to IBISWorld industry analyst, Nima Samadi, “conditions improved in 2010 and 2011, and this trend is expected to continue in 2012 with industry revenue growing 1.7% to $1.1 billion from 2011 to 2012.”
The Shell and Tube Heat Exchanger Manufacturing industry relies heavily on several key markets to purchase its products. Samadi adds that “among commercial and institutional markets, 2010 and 2011 has been a mixed bag. While the power generation and electric utilities markets’ revenue has increased, structural problems within the industries have created disincentives to invest in infrastructure improvements. However, some segments have performed well through the recession. Revenue from food and beverage processors has grown, with rising dairy prices increasing demand from dairy producers.” The utility services market is expected to grow as energy output increases from existing facilities, demanding the replacement of existing heat exchangers with higher-capacity units.
Many industry products have become standardized, causing product pricing to become the primary basis of competition. This development ultimately favors foreign manufacturers and has resulted in imported goods satisfying an increasing amount of the domestic market, even during the unfavorable economic climate. The increasing level of foreign competition will result in the number of companies declining at a rate of 2% per year over the next five years.
The Shell and Tube Heat Exchanger Manufacturing industry consists of four firms that make up over 60.0% of industry revenue. Industry concentration has also been increasing. Over the past five years, many small and medium sized firms have exited the industry, while some of the larger players have engaged in major merger and acquisition activity. The larger firms have also continued to grow through increasing their presence in global markets, which has mitigated losses or downturns in revenue generated by the deterioration of domestic markets. Industry major players include Modine Manufacturing Company and Chart Industries.
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This industry manufactures shell and tube heating exchangers, which are the most common heat exchangers used in oil refineries and other large chemical processes. In addition to their manufacturing activities, firms also provide installation services for their products. Heat exchangers allow thermal energy to be transferred between fluids while keeping them separate.
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Products & Services
Globalization & Trade
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