Urban population growth and tighter regulations will strengthen industry demand
Los Angeles, CA (PRWEB) April 25, 2012
Demand for street sweeping vehicles dipped during the Great Recession, as governments and commercial clients delayed buying large equipment. According to industry analyst Agata Kaczanowska, “high unemployment reduced the amount of cars and waste on the road, hurting industry demand.” It also reduced government and commercial revenue, tightening the budgets of the Street Sweeping Vehicle Manufacturing industry's major customers. However, tax incentives and stimulus spending have helped the industry bounce back significantly in the past couple of years. In the five years to 2012, revenue is expected to grow at an annualized rate of 0.8%, including a 5.3% increase in 2012 to $283.0 million.
Streets are swept to prevent exhaust, litter and other debris from entering water systems. Street sweeper vehicles are increasingly important in the long term, as scientific studies monitor water sources and lobby for tighter regulations to protect wildlife and drinking water. In particular, Kaczanowska says “the urban population is growing steadily, and areas with a high population density are strictly monitored by the Environmental Protection Agency (EPA) due to their potential to destroy nearby natural resources.” In addition to monitoring water quality, the EPA also regulates air quality, which has encouraged manufacturers to develop and build the low-emissions vehicles that are in high demand by street sweeping fleet owners. With the increasing price of gas, fleet owners are also looking to cut costs by using alternative fuels. The Street Sweeping Vehicle Manufacturing industry responded during the past five years with several vehicles that are hybrids or run exclusively on alternative energy sources. Furthermore, several new manufacturers are expected to enter the industry in the five years since 2007, boosting the number of enterprises to 10 at a 4.6% annualized rate through 2012.
In the next five years, the industry is expected to continue growing and innovating. Low government spending will also hamper growth as cities and other local governments struggle to balance budgets in the next couple of years. Nonetheless, innovation is anticipated to drive demand as fleet owners continuously seek out efficiencies by updating their vehicles. Street sweeping vehicle manufacturers will likely experience revenue growth in the five years to 2017. The industry will likely remain highly concentrated, with the three largest players (i.e. Federal Signal, the Alamo Group and TYMCO) accounting for the majority of the market. Operators compete in a very niche and mature market, where competition has intensified significantly over the past decade.
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This industry produces street sweeping vehicles that are designed to remove material from road surfaces. Street sweeper vehicles are equipped with water tanks and sprayers, regenerative air technology or vacuums.
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