Renewed local funding for new fire trucks and engines will drive modest growth
Los Angeles, CA (PRWEB) April 27, 2012
The Fire Truck Manufacturing industry was unable to rescue itself from the grips of the economic downturn. In 2009, industry revenue fell 15.6%, and it continued falling in 2010 as local and state governments struggled to balance their budgets and federal Assistance to Firefighters Grant (AFG) appropriations plunged. Despite some growth over 2011, sales of new fire trucks and engines are expected to continue tumbling by 0.8% in 2012 as federal, state and local government funding continues to tighten. According to industry analyst Tony Danova, “industry revenue is expected to decrease at an average annual rate of 5.0% to $3.9 billion over the five years to 2012.”
Beyond local and state funding, the Fire Truck Manufacturing industry depends on federal funding for homeland security, particularly for the AFG program, which helps firefighters and their respective departments obtain vehicles, equipment, protective gear, training and other resources needed to properly protect the public from fire hazards. Danova says, “funding for the program has declined during the past five years, with appropriations estimated to fall at an average annual rate of 9.2% to $337.5 million in 2012.” Rural, suburban and urban agencies have had to compete for limited funding, particularly as federal budgets have tightened. At its peak, appropriations for the AFG program reached $746.0 million in 2004. In 2010 (most recent data available), about $2.6 billion in grants were requested, but only 15.3% ($390.0 million) was granted as appropriations fell 31.0% that year. In 2012, appropriations are anticipated to fall 16.7% from 2011, further hurting demand for fire trucks and engines.
The industry's leading manufacturers, Oshkosh and Rosenbauer, are large-scale firms that compete on a global market. The remaining firms typically cater to local or regional markets. Also, many of the industry's largest companies produce a diversified lineup of products, not binding themselves solely to fire trucks or fire engines. Over the next five years, the industry will grow along with an improving economy, rising tax revenue and greater local and state funding for US fire departments. As funding increases, investment in new fire trucks and engines will bode well for manufacturers. Furthermore, the fleet of fire trucks and engines is aging. Departments used older vehicles instead of purchasing new ones during the past five years, so demand for upgrades will pick up in the five years to 2017.
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This industry manufactures fire trucks and fire engines. These vehicles assist in fighting fires by transporting firefighters and essential equipment, such as pumps, ladders and safety gear, to the scene of fires.
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