The Structural Steel Fabricating industry contends with rising import competition from low-cost producers
Melbourne, Australia (PRWEB) July 06, 2012
The Structural Steel Fabricating industry in Australia reflects trends prevalent in the housing and non-housing construction markets. Its fortunes are inextricably tied to the level of construction activity. This relationship has historically provided the industry with strong opportunities to grow, until the onset of the economic downturn in late 2008. According to IBISWorld industry analyst David Stephen, “prior to the downturn, the industry was buoyed by robust activity in the non-residential construction industries, especially institutional buildings and public infrastructure works such as roads and bridges”. The overall situation for the industry has not been ideal since the economic collapse, as construction was effectively crippled. The Structural Steel Fabricating industry has also had to contend with rising import competition from low-cost producers in China and Indonesia.
Consumer and business confidence plummeted in late 2008, with access to credit becoming difficult to secure. Stephen adds, “this led to a dramatic decline in the number of housing starts in 2008-09”. Housing starts returned to strong growth in 2009-10, before a downward correction towards more sustainable levels during the following year. Consequently, steel prices, which rose strongly prior to the downturn, declined sharply due to anaemic demand conditions. This fall was partially offset by modest growth in non-residential construction. In the five years through 2011-12, industry revenue is expected to grow by 1.0% per annum to total $7.76 billion. This includes forecast growth of 1.5% during 2011-12. Domestic demand is expected to be erratic over the period, but is expected to continue its long-term upward trend. The Structural Steel Fabricating industry exhibits a medium level of market share concentration, and the two major players are Arrium Limited and BlueScope Steel.
Over the five years through 2016-17, the Structural Steel Fabricating industry is expected to make a steady recovery, underpinned by improved economic conditions buoying construction activity. Non-residential construction will lead the charge, followed by heavy industry and non-building construction. Steel prices are forecast to decline over the next five years, thus encouraging construction activity and benefit the industry in the form of increased profit.
For more information, visit IBISWorld’s Structural Steel Fabricating report in Australia industry page.
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IBISWorld industry Report Key Topics
Firms in this industry manufacture structural steel components for incorporation in buildings or other structures.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Technology & Systems
Regulation & Policy
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