Los Angeles, CA (PRWEB) June 27, 2012
From the construction of power plants, refineries and bridges to the repair and restoration of historic buildings, the Scaffolding Contractors industry benefits from widespread demand across many markets. Nonetheless, says IBISWorld industry analyst Andrea Alegria, “The collapse of the housing market and the subsequent economic recession brought construction activity in most markets to a near halt, significantly hurting the industry's performance.” Consequently, revenue is expected to decline at an average annual rate of 6.2% to $1.9 billion in the five years to 2012.
During that time, residential construction slumped to historic lows, dropping at an average rate of 9.8% per year to about $349.5 billion in 2012, as foreclosures, declining home prices and tightening credit standards contributed to soft housing demand conditions. Non-residential construction, the industry's largest revenue generator, also declined at an average annual rate of 5.4% to about $332.8 billion in the five years to 2012. Reduced corporate profit, high unemployment and low consumer spending weakened demand for new office, retail, and industrial spaces, in turn, hurting demand for scaffolding contractors. The industry experienced declining revenue from 2007 through 2011 with the steepest decline of 20.4% occurring in 2009 during the peak of the recession. Over the past five years, says Alegria, the industry battled a difficult economic environment characterized by stalled or canceled spending on new construction projects in the private and public sectors. Firms increasingly relied on solid working relationships with past clients in order to keep crews busy and maintain profit margins. As demand dwindled, many industry operators slashed prices, putting pressure on margins, which became especially difficult to endure for smaller operators. The Scaffolding Contractors industry is dominated by these small firms; very few companies capture more than 1.0% of the market. The industry’s two major players, the Brock Group and Harsco Infrastructure, together account for only about a quarter of industry revenue.
The industry's recovery started in 2011 and has gained momentum in 2012. Industry revenue is expected to grow 11.0% over 2012, boosted by resurgence in construction activity, primarily from residential markets. Continued recovery in downstream construction markets will help the industry return to growth in the five years to 2017. For more information, visit IBISWorld’s Scaffolding Contractors in the US industry report page.
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IBISWorld industry Report Key Topics
This industry leases, erects and dismantles scaffolding equipment. Scaffolding can be used during construction, painting, exterior remodeling and for other construction-related activities that require workmen to work above ground level.
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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