Since wheelchairs are expensive durable goods, companies use innovation and acquisition to spur new growth
Los Angeles, CA (PRWEB) January 22, 2012
The Wheelchair Manufacturing industry has remained strong during the five years to 2012. According to IBISWorld industry analyst Mary Gotaas, “despite a volatile economy, the industry continues to grow because of favorable demographics and health spending. Since most wheelchairs are used by older adults, the aging population has increased demand for industry products. In addition, private and public spending is growing, which further boosts industry revenue. Nevertheless, the industry has been negatively affected by rising material costs, such as the price of plastic, which has hurt profit margins”. From 2007 to 2012, revenue is expected to increase by an average of 5.5% to $2.8 billion. During 2012, revenue is estimated to grow by 6.2%, driven by a higher level of private health care spending.
Gotaas says that “in the five years to 2017, the industry will continue to flourish”. The population will continue to age, bolstering demand for medical care and long-term durable medical equipment, such as wheelchairs. With more consumers over the age of 65, private and public spending will rise. On the other hand, healthcare reform may negatively affect public healthcare spending and put an excise tax on wheelchairs, adversely affecting the industry; however, these factors have yet to be determined. Lastly, changing input costs will likely influence profit margins, but shifts in costs are not expected to be as drastic as previous years. Despite strong industry growth in the next five years, the industry is expected to consolidate. The number of firms is projected to decrease by an average of 1.8% per year to 375 firms in 2017. As companies consolidate, firms will reduce their work force slightly to become more efficient. As a result, employment is expected to decrease by an average of 0.3% per year to 9,640 workers.
Industry market share concentration measures the extent to which major players dominate an industry. Concentration is expected to be low, with the top four major players accounting for 34.8% of the industry’s revenue. Invacare is the largest player with Sunrise Medical in second place. The company offers a range of wheelchairs, including custom manual chairs, power wheelchairs and high-end sports and recreation products. With product diversification, this company is able to cater to many different consumer markets. Market concentration has increased over the past five years as larger firms have acquired smaller firms to increase their product line and customer base. Since wheelchairs are expensive durable goods, companies use innovation and acquisition to spur new growth. By acquiring existing firms with innovative products, companies can benefit from new product development without higher R&D costs.
For more information visit IBISWorld’s Wheelchair Manufacturing industry page
Follow IBISWorld on Twitter: https://twitter.com/#!/IBISWorld
Friend IBISWorld on Facebook: http://www.facebook.com/pages/IBISWorld/121347533189
This industry manufactures manual and powered wheelchairs and powered scooters.
IBISWorld 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
About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.