Volatile conditions continue with subdued demand and tightening budgets
London, United Kingdom (PRWEB) May 11, 2012
The Recreational Boat & Yacht Building industry has been volatile in the past five years, with industry revenue growing by 24% in 2007-08 before declining by 10% in 2009-10. According to IBISWorld industry analyst Caroline Finch, “the overall trend has been downwards, with industry revenue expected to contract at an annualised 5.8% over the five years through 2012-13”. The dramatic rise and fall in fortunes can be directly linked to the recession. Pleasure and sports boats are discretionary purchases. As the industry completed its order book heading into 2008-09, new customers were put off by growing global uncertainty. Revenue fell in the years that followed. Balloon payments for goods completed in 2008-09 masked the true extent of the drop in demand.
In response, the industry has slashed employment and wages to protect profitability. Average industry profits fell sharply between 2007-08 and 2009-10. Declining revenue and activity meant that final payments by mega yacht customers in 2008-09 contributed to a huge profit margin as the industry cut employees and purchases. Since then, the industry has shown signs of recovery but has been subdued, with industry revenue yet to return to pre-recession levels. Finch adds, “the lull in new orders means that it will take a few years before activity picks up significantly, even though segments of the industry have outperformed and demand for luxury yachts remains strong”. In 2012-13, industry revenue is expected to fall by 5.7% to £913.5 million. Over the five years through 2017-18, industry revenue is forecast to grow as orders come in and are filled. The growth will be skewed towards the end of the period as the next two years continue to be marked by subdued demand resulting from an uncertain economy, the drought affecting domestic demand for canalling and tighter controls on credit.
The Recreational Boat & Yacht Building industry has a medium level of market share concentration. The industry's largest players are concentrated in the super-yacht and luxury markets, with only one equipment supplier among them. As a result of the industry's supply chain, the major players have more power than their revenue suggests. Downstream suppliers of boat equipment, components and labour subcontracting work closely with the major players. Major companies include Sunseeker International, Princess Yachts International, Fairline Boats and Raymarine UK.
For more information on the Recreational Boat & Yacht Building industry, including latest industry trends, statistics, analysis and market share information, purchase the full report from IBISWorld, the nation’s largest publisher of industry research.
IBISWorld industry Report Key Topics
This industry manufacturers recreational boats in the United Kingdom. This includes the construction of man powered, sail and motor boats. Industry operators also manufacture small amounts of support equipment such as life jackets and rigging.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalisation & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
Recognised as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on many UK industries. 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 London, IBISWorld serves a range of business, professional service and government organisations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.co.uk or call (020) 3008 6568.