Los Angeles, CA (PRWEB) May 08, 2012
The Air and Gas Compressor Manufacturing industry's performance was pulled down in 2008 and 2009 along with falling industrial activity worldwide and plunging demand from major downstream markets, particularly construction and related machinery manufacturing. Continued weakness in construction markets despite rising manufacturing activity has failed to raise the industry above its prerecession highs, says IBISWorld industry analyst Brian Bueno. Nevertheless, the industry recorded healthy growth of 4.8% in 2011. Over 2012, revenue is estimated to grow another 5.4% to $6.9 billion, marking an annualized rate of decline of 1.7% since 2007.
Currently, 194 companies manufacture air and gas compressors, related parts and industrial spraying equipment in the United States. This represents a decline over the past five years because many firms exited the industry during the economic decline. The Air and Gas Compressor Manufacturing industry has a low level of concentration, with the top firms including Gardner Denver Inc., Atlas Copco and Dresser-Rand Group Inc. The industry's large players are able to use economies of scale and brand recognition to offer compressors across sectors to the world market. However, most of the industry comprises specialized, localized small players. These companies typically only operate in a small geographic region and serve only one market, such as the mining sector or the automotive industry, continues Bueno. The industry consolidated over the five years to 2012 as small-scale operators exited the industry. However, the number of enterprises is expected to grow in the coming five years as increasing demand opens up room for new small players. The steepest drop in the industry has been in employment. Over the five years to 2012, the number of industry employees is projected to fall at an annualized rate of 3.4% to about 13,852. Nearly 2,600 fewer employees operate in the industry in 2012 compared to 2007. Productivity enhancements, through capital investments and operational improvements, have since resulted in lessened labor requirements.
Despite falling revenue, rising productivity helped offset growing wage costs. These enhancements also helped firms regain profit margins after substantial losses in 2008 and 2009. Major company Gardner Denver, for instance, recorded a substantial loss in 2009; since then, company profit margins have climbed and eclipsed those achieved in 2007. Similar trends have occurred in the overall industry. Struggling and less profitable firms either exited the industry or were acquired by larger firms. Profit margins have grown strongly in 2011 and into 2012 because large operators have benefited from stronger demand for industry products. Over the next five years, the industry is expected to enter a period of sustained growth, aided by a strengthening US economy and rising demand from industrial markets worldwide. In addition, the long-awaited recovery of the US construction sector will increase demand for air and gas compressors used in construction machinery. From 2012 to 2017, industry revenue is forecast to grow. For more information, visit IBISWorld’s Air and Gas Compressor Manufacturing in the US industry report page.
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IBISWorld industry Report Key Topics
This industry manufactures air and gas compressors, parts for air and gas compressors and industrial spraying equipment.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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 http://www.ibisworld.com or call 1-800-330-3772.