Foreign competition and input prices will remain high, hampering industry growth
Los Angeles, CA (PRWEB) March 23, 2012
The tale of the Air Gun and Airsoft Gun Manufacturing industry mirrors several industries within the US manufacturing sector that rely on plastic and steel to produce relatively small, simple goods: Production has moved overseas. As such, “imports satisfy virtually all domestic demand,” says IBISWorld industry analyst Josh McBee, “while exports are responsible for driving what little revenue remains for US manufacturers like Crosman Corporation.” In fact, Crosman dominates the industry, while other industry leaders either forego US manufacturing to focus instead only on assembly (e.g. Daisy Outdoor Products) or conduct their entire manufacturing and assembly operations overseas to focus solely on US distribution (e.g. Cybergun). In either case, American air gun and airsoft gun enthusiasts largely purchase imported weaponry.
In addition to the pervasive outsourcing, the recessionary period of 2009 limited consumer sentiment. Disposable incomes fell in line with rising unemployment, thus making the potential market for the Air Gun and Airsoft Gun Manufacturing industry's discretionary items smaller than usual. At the same time, says McBee, rising input costs in plastic and steel have forced manufacturers to narrow their margins to remain competitive with cheaper imports. As a result of these combined adverse conditions, industry revenue is expected to fall at an annualized rate of 0.3% during the five years to 2012. During 2012, conditions are expected to improve in line with returning consumer sentiment as the US job outlook improves.
While the industry's performance outlook is positive, revenue is projected to remain below the 2008 peak for at least the next three years. Imports are forecast to remain high through the five-year period, consistently accounting for more than 95.0% of domestic demand. Foreign competition will likely continue to offer cheaper goods of similar quality, and input prices are projected to remain near their current highs. As a result, price-based competition will only intensify. The resulting pressure on operators' margins will likely force some companies to move production overseas or exit the industry altogether. The Air Gun and Airsoft Gun Manufacturing industry has a high level of market share concentration. The large companies that lead the industry benefit from significant brand recognition and have established distribution channels with mass merchandisers, such as Walmart and Kmart, and national sporting goods stores, which gives them a significant advantage in the industry. For more information, visit IBISWorld’s Air Gun and Airsoft Gun Manufacturing report in the US industry page.
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IBISWorld industry Report Key Topics
This industry primarily manufactures air guns and airsoft guns, which are distinct from firearms. Air guns and airsoft guns use air or gas, while firearms burn a propellant. Air guns and airsoft guns are used for hunting, pest control, recreational shooting and competitive sports. Spring-loaded, pneumatic, gas-powered and electric guns are included, but guns designed specifically for paintball are excluded.
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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