Structural Metal Product Manufacturing in the US Industry Market Research Report from IBISWorld has Been Updated

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As construction activity rebounds in the next five years, so will the industry's fortunes. Profitability will be aided by a ramp-up in production brought on by rising demand, and increases in the price of inputs will be easier to pass on to consumers.

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Construction demand will spur recovery, while large companies grow through acquisitions

The Structural Metal Product Manufacturing industry produces fabricated metal panels, sections, plates, bar joists and reinforcing bars that are used ubiquitously throughout the residential and commercial construction industries. Following a few dismal years at the height of the recession, industry revenue is expected to increase 4.1% to $39.6 billion in 2012 due to an uptick in residential and commercial construction activity. “Nevertheless, demand conditions have been bleak over the past five years,” says IBISWorld industry analyst Sean Windle. In the wake of the subprime mortgage collapse and subsequent recession, residential and commercial construction activity plummeted, significantly reducing the demand for industry goods. As such, industry revenue is expected to decline at an average annual rate of 4.8% in the five years to 2012.

Along with revenue, industry profitability has taken a hit over the past five years because key input prices have increased. In the five years to 2012, the price of steel rose at an average annual rate of 2.8%. According to IBISWorld analyst Sean Windle, “in times of high demand, industry firms would normally pass the additional costs on to customers, but with weak demand from the construction sector, companies were forced to minimize markups.” Import penetration has also negatively affected profitability during the five-year period. Emerging economies such as China and Mexico, which together account for nearly half of all industry imports, enjoy more relaxed labor and environmental standards than US manufacturers; therefore, they can produce goods at a lower cost. This has placed a tremendous amount of pressure on domestic manufacturers, which must either lower prices or risk losing business to lower-cost foreign importers. As a result, profit decreased from 6.3% of industry revenue in 2007 to 3.7% in 2012. To offset price reductions, operators consolidated to cut costs. Consequently, the number of industry establishments fell at an average annual rate of 0.5% to 5,453 plants.

IBISWorld estimates that the top four firms operating in the Structural Metal Product Manufacturing industry account for just over half of total industry revenue in 2012, representing a medium market share concentration that consists of two major players and a large number of small, local operators. The medium concentration level is evident in employee figures, with close to two-thirds of businesses employing fewer than 20 people, and the remaining companies employing more than 100 people. The past five years have been marked by a moderate rise in market share concentration. The increase in concentration is primarily due to larger companies expanding through mergers and acquisitions, as well as smaller businesses being forced out during the recession. Looking ahead, industry concentration is expected to grow over the next five years, fueled mainly by the acquisitions of larger companies, such as Nucor Corporation and Commercial Metals Company. While smaller operators will enter the market, they will likely be bought out by larger companies as they expand.

Despite the doom and gloom of the past five years, the industry is projected to grow as construction activity picks up and economic conditions improve. In the five years to 2017, revenue is forecast to grow. Demand from infrastructure-related construction is expected to pick up as well, with government funding for highways set to increase each year.

For more information, visit IBISWorld’s Structural Metal Product Manufacturing in the US industry report page.

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IBISWorld industry Report Key Topics

Operators in this industry manufacturer one or more of the following products: fabricated structural metal products; prefabricated metal buildings, panels and sections; and metal plate work. Specific items produced include steel and concrete reinforcing bars, fabricated bar joists and structural panels for bridges, boats and ships.

Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
Globalization & Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
Major Companies
Operating Conditions
Capital Intensity
Key Statistics
Industry Data
Annual Change
Key Ratios

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 or call 1-800-330-3772.

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Gavin Smith
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