New thermal imaging products and lower prices will encourage demand from commercial users
Los Angeles, CA (PRWEB) February 02, 2012
The Thermal Imaging Equipment Manufacturing industry has experienced strong growth over the five years to 2012, due to innovative products and improved demand from commercial and industrial markets. From 2007 to 2012, industry revenue is estimated to rise at an average annual rate of 6.4% to $4.5 billion; this growth includes a projected revenue increase of 7.4% during 2012. Traditionally, the industry's primary users have included military personnel, law enforcement officers and fire fighters who utilize thermal imaging for visibility purposes. However, as the price of thermal imaging equipment has declined, other markets have increased their usage. These customers include commercial and industrial markets such as utilities companies, building inspectors, automotive and boat manufacturers and other manufacturing plants. Firms use infrared technology to determine temperature variations and improve visibility for cars and boats. According to IBISWorld industry analyst Caitlin Moldvay, “the widespread adoption of new commercial and industrial market applications has generated strong growth for the industry.”
An estimated 70 companies operate in the industry. Over the five years to 2012, the number of industry operators has declined at an average annual rate of 1.4%. According to Moldvay, “while companies have continued to enter the industry, increased merger and acquisition activity has led to overall industry consolidation.” Because of this increase in consolidation, the average company in the industry typically has profit margins of 12.2%. Improving economic conditions will positively affect revenue over the five years to 2017, as they facilitate growth from commercial and industrial market clients. Nevertheless, federal defense cutbacks are expected to mitigate some of this revenue increase, with demand from this traditional market expected to fall during the period.
This industry has a low level of market share concentration. The top company is FLIR Systems, and Fluke Corporation, Testo USA and Sierra Pacific Innovations also compete in the industry. The market for thermal imaging equipment is highly competitive, where large and niche players compete on the basis of continued product innovation. Over the past five years, the industry has experienced a high level of acquisition activity as firms seek to increase market share. The industry is characterized by a relatively stable number of players and most are outsourcing production to low-cost countries. IBISWorld projects industry consolidation will increase in the five years to 2017.
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This industry manufactures devices that are capable of detecting radiation in the infrared range and producing an electronic signal that is then displayed on a screen. These devices are used to improve visibility and detect temperature differences.
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