Difficult economic conditions drained industry revenue, but renewed construction will bolster growth
Los Angeles, CA (PRWEB) May 31, 2012
With the downturn in the construction sector, demand for the Faucet Manufacturing industry dried up. Demand for faucets primarily relies on the number of new houses built, residential remodeling activity and trends in the non-residential construction market. As a result, with the residential construction market entering into its most significant downturn since the Great Depression, industry revenue contracted at double-digit rates in 2008 and 2009. Over the five years to 2012, revenue for the Faucet Manufacturing industry declined at an average annual rate of 5.0% to an estimated $1.2 billion. “However, with the modest recovery in the construction sector over the past three years, industry revenue turned the corner in 2010 and is expected to post 4.1% revenue gains during 2012,” said IBISWorld industry analyst Caitlin Moldvay.
The Faucet Manufacturing industry is composed of an estimated 34 companies that manufacture domestically. This includes prominent manufacturers like Masco Corporation, American Standard Companies and Kohler Co. Over the past five years, however, with challenging economic conditions and competition from overseas manufacturers, the number of industry operators declined at an average annual rate of 4.1%. Moreover, industry manufacturers have faced challenges stemming from changing state and federal regulations to reduce lead content in plumbing fixtures and faucets. As a result, industry operators have altered production processes to comply with new regulations. According to Moldvay, over the next five years, the Faucet Manufacturing industry will benefit from the expected recovery in the construction sector, which will lead to greater demand for industry products. During the five years to 2017, housing starts are projected to rise, while spending on remodeling activity is forecast to also rise. As a result of growing demand from the construction sector, industry revenue is forecast to increase at a steady pace.
The US Faucet Manufacturing industry has a high level of industry concentration with the top four major players accounting for about 84.7% of industry revenue in 2012. This represents an increase from 2007 when the top four major players accounted for about 75.6% of industry revenue. IBISWorld estimates that about 34 companies manufacturer faucets domestically in 2012, which represents a 4.1% decrease compared with 2007 when an estimated 42 companies operated in the United States. Lower demand during the recession and industry mergers and acquisitions resulted in a slight increase in industry concentration. However, the industry's low barriers to entry are expected to attract more companies to enter the industry, which is expected to bring industry concentration down over the next five years to 2017. For more information, visit IBISWorld’s Faucet Manufacturing in the US industry report page.
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IBISWorld industry Report Key Topics
The industry manufactures residential and non-residential faucets that are mainly used in bathrooms, laundry rooms and kitchens.
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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