Los Angeles, CA (PRWEB) July 17, 2012
Cable and wire are the backbone of the modern information age. As demand for energy and communications infrastructure grows, demand for wire and cable increases. Over the five years to 2012, however, demand has dropped due to a weak economy, dramatic declines in building activity and falls in corporate investment and industrial activity in the United States. As a result, the Wire and Cable Manufacturing industry's revenue is expected to decline at an annualized rate of 1.8% over the period. According to IBISWorld industry analyst Justin Waterman, the overall decline is mainly due to losses the industry experienced from 2007 to 2009, with a 22.7% revenue drop in 2009 alone. Greener pastures lie ahead for the industry, though: Revenue is estimated to increase 2.5% in 2012 as infrastructure investment and consumer spending recover.
Wire and cable manufacturing operations are expected to generate revenue of $16.2 billion in 2012, of which $5.6 billion is from export sales. Imports also make up a significant chunk of demand for wire and cable and are expected to be worth $6.6 billion (38.5% of industry revenue) in 2012. “In the early part of the five years to 2012, decreasing domestic demand and increasing pricing pressure from imports dampened domestic sales,” says Waterman. “Demand for industry products was hurt by sluggish investment from telephone companies and electric utilities, a slow US industrial sector and a sharp decline in home construction activity, including a 38.8% decline in 2009.” Even though economic conditions have not been favorable to industry participants over the past five years, the promise of future growth, high margins and the lure of niche markets are expected to drive the number of firms to increase at an average annual rate of 6.4% from 317 in 2007 to an estimated 432 in 2012. The Wire and Cable Manufacturing industry is highly concentrated. Industry concentration varies by industry segment. There are only two major producers of magnet wire in North America, and the building wire industry segment has experienced significant consolidation in recent years. This consolidation is due primarily to cost efficiencies achieved by the larger producers as they capitalize on the benefits of vertical integration and manufacturing, purchasing and distribution economies of scale. Major industry companies include Southwire Company, LS Cable & System Ltd., General Cable Corporation, CommScope Inc. and Encore Wire Corporation.
Continuing positive trends are forecast to push up revenue over the five years to 2017. Demand for reliable and efficient energy and data communications will promote sales of cable and wire, as will a strengthening US economy and government incentives to the energy and high-speed broadband sectors. Building activity is also expected to gain traction throughout this period, further jump-starting the industry. For more information, visit IBISWorld’s Wire and Cable Manufacturing in the US industry report page.
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IBISWorld industry Report Key Topics
This industry comprises establishments that insulate fiber-optic cable and manufacture insulated nonferrous wire and cable from nonferrous wire drawn in other establishments.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. 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 Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.