Demand for industry services will strengthen, as downstream construction markets improve
Los Angeles, CA (PRWEB) November 15, 2012
The Excavators industry derives about three-quarters of its revenue from subcontracting services from private-sector clients, such as land development companies, institutional building contractors and residential contractors. The rest is derived from the excavation of land for non-building construction (e.g. sporting fields, roadwork and water supply facilities). While nearly every construction project requires some kind of excavation work, the Excavators industry does not account for the total value of excavation work undertaken in the United States. Instead, industry activities are contested by general construction firms (i.e. contracted to construct a building or structure on cleared land), heavy construction contractors, highway and road contractors, engineering firms, demolition and wrecking contractors and other specialist contracting firms.
Revenue has displayed a sharp decline over the past five years, falling at an average annual rate of 4.4%, while the US economy maintained minimal growth (GDP growth of 0.6% per year), according to IBISWorld industry analyst Deonta Smith. The deep contraction in the industry's performance corresponds with the sharp decline in demand for excavation services in the depressed housing market and the recession-induced downturn of investment into the nonresidential building market. Some earthmoving contractors have benefited from a boost in federal funding for road, bridge and other infrastructure construction, but the extent of the slump in the downstream building markets has hit most contractors very hard. Revenue for the excavators industry is expected to stabilize over 2012 and increase 5.6% to total $26.8 billion, Smith says.
Demand for industry services is expected to strengthen with the anticipated recovery of the downstream construction markets. Private residential and nonresidential building construction is expected to pick up in 2012, while sustained growth in the infrastructure and public building construction markets is expected from 2013 through 2017. Subsequently, IBISWorld forecasts that industry revenue will grow over the next five years. This industry has a low level of concentration, as it is mainly comprised of small-to-medium sized contractors that operate in specific regional markets. For more information, visit IBISWorld’s Excavators in the US industry report page.
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IBISWorld industry Report Key Topics
This industry primarily excavates land for building construction. Activities include drilling shafts, foundation digging and drilling, and grading. The excavation work performed includes new work, additions, alterations and repairs.
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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