A wave of health consciousness has been supporting demand for athletic equipment
Los Angeles, CA (PRWEB) May 12, 2012
The Gym and Exercise Equipment Manufacturing industry produces a variety of equipment for retailers and wholesalers, including treadmills, exercise bikes and weights. Revenue is heavily affected by sports participation, downstream demand from retailers and wholesalers and exchange rates, according to IBISWorld industry analyst Dale Schmidt. Exchange rates, in particular, have been strong indicators for the industry's direction; the increase in imports and the decrease in exports in recent years have led to a slow decline for the entire sector.
In the five years to 2012, the Gym and Exercise Equipment Manufacturing industry experienced many hurdles. During the period, IBISWorld estimates that revenue declined an average 3.7% annually to $3.8 billion. In 2011, the industry experienced its first year of revenue growth in more than 10 years, and is expected to experience another year of slight growth in 2012, estimated at 0.6%. Growth in the volume of sporting goods imported into the United States has created a significant obstacle for manufacturers during this period, leading to weak industry sales, Schmidt says. In addition, the recession has caused consumer demand for discretionary goods, such as sporting and athletic equipment, to decline. This factor has created a buildup in inventory at the retail level, translating to decreased demand for manufactured goods. As a result of year-on-year revenue declines, the number of industry operators has declined 3.8% annually to 469 in 2012 as companies consolidated or left the industry.
During the five years to 2017, the industry is expected to grow. A recovering economy will result in improved sales at the retail level. As more consumers become increasingly health conscious and the government ramps up its anti-obesity programs, demand for athletic equipment will increase, leading to steady growth in revenue. Nevertheless, the number of employees in this industry will decrease over the five-year period. This decline will occur because of the need for companies to decrease their labor costs in the United States. As a result, the outsourcing of jobs overseas will become more prevalent and import penetration will steadily increase. Concentration levels have remained low for this industry over the five years to 2012. Competition led to declining enterprise numbers over the period. The low concentration may also be partly attributed to the diverse range of products manufactured by operators, making it difficult for any single players to hold a dominant share of the market. Strong competition within the industry and from external players has resulted in this significant price-based competition, which has led to a squeeze on profit margins and prevented firms from accumulating excessive market share within this industry. Of the various segments in this industry, golf equipment manufacturers and gymnasium and exercise equipment manufacturers have the lowest concentration levels. The concentration for the fishing tackle and equipment segment is high. For more information, visit IBISWorld’s Gym & Exercise Equipment Manufacturing in the US industry report page.
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IBISWorld industry Report Key Topics
Operators in this industry manufacture gym and exercise machines including treadmills, exercise bikes, weights and other equipment for both home and fitness centers. Following the design of sample products, manufacturers buy raw materials and transform these into a range of athletic equipment. The finished products are then marketed to wholesalers and retailers.
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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