Imports will limit industry growth, even as the housing market improves, and ultimately push the industry back into a downward trend
Los Angeles, CA (PRWEB) January 15, 2012
Revenue earned by the Automatic Level Instrument Manufacturing industry collapsed after the housing market began to crash in late 2006. The number of new houses being built and the number of existing homes being sold tumbled along with house prices. This decline reduced demand for automatic level instruments from the construction and do-it-yourself markets, as well as the surveying and commercial construction markets. As such, the Automatic Level Instrument Manufacturing industry’s revenue fell at an estimated average rate of 4.6% per year to $398.3 million in the five years to 2012, despite modest expected growth of 1.0% this year. According to IBISWorld industry analyst Caitlin Moldvay "over the five years to 2017, the industry is expected to continue its decline, despite some growth at the beginning of the five-year period. As the economy picks up, US housing starts are projected to increase strongly, along with a rise in income and consumer sentiment. However, imports will limit industry growth and ultimately push back into a downward trend."
The industry has faced rising import penetration in the past five years, Moldvay adds, largely due to the fact that industry leader, Robert Bosch GmbH is headquartered in Germany and the fact that the industry must now also compete with imports from low wage countries like China. Imports accounted for 36.1% of domestic demand in 2007 and grew to 45.1% by 2012. Housing starts, a key indicator of the Automatic Level Instrument Manufacturing industry’s current and future performance, suffered heavy declines over the previous five years. In 2007, 1.4 million new houses entered the construction phase, but by 2009, that figure dropped to 559,500. Following some growth in 2010 and 2011, housing starts are expected to rise in 2012. Consistent with this pattern, the non-residential market remained mired in a sluggish 2011 while the economy at large has hit its trough and entered the recovery phase. The surveying and mapping market also demands automatic level instruments. Because of poor operating conditions, surveying revenue has fallen at an estimated average annual rate of 1.0% in the five years to 2012, which also reduced the demand for surveying equipment, such as automatic level instruments.
The Automatic Level Instrument Manufacturing industry has a low level of market share concentration. In 2012, the top four companies in the industry are expected to account for 17.6% of total revenue. Large companies in the industry are typically diversified consumer and industrial goods producers. The largest player, Robert Bosch GmbH, significantly increased its respective market share with the 2008 acquisition of CST/Berger. Furthermore, the 2010 merger of The Stanley Works and Black & Decker into Stanley Black & Decker, Inc. resulted in a new major company in the Automatic Level Instrument Manufacturing industry. Both companies have significantly increased their presence in the industry over the past five years, resulting in a higher level of market share concentration for the industry.
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This industry manufactures automatic leveling instruments, which are optical instruments used in surveying and building to transfer, measure, or set horizontal levels.
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