Downstream manufacturers will use more recycled goods, benefiting the industry
Los Angeles, CA (PRWEB) August 11, 2012
The Recycling Facilities industry, which sells recycled commodities and finished goods to customers, has expanded at an average annual rate of 4.4% over the past five years. Although the recession reduced consumer demand for products in general, demand for products manufactured with recycled goods has risen overall during the past five years due to shifts in consumer preference toward products that are perceived as environmentally friendly. Manufacturers of products made with recycled materials demanded more recycled commodities from wholesalers, in turn aiding industry demand. “Despite revenue gains during the past five years,” says IBISWorld industry analyst Deonta Smith, “there was considerable volatility in recycled commodity prices, which dropped during the recession in response to slumping consumption.” Recycled commodity prices are set to rebound from 2011 to 2012, prompting an estimated 3.9% jump in revenue to $5.5 billion.
During 2009, recycled commodity prices were particularly low, hitting revenue in a big way. Revenue volatility became a concern for industry players, and many sought to consolidate operations to become more stable and achieve greater economies of scale. Ultimately, though, increased consolidation has not reduced the number of players; more firms entered the industry after the recession amid growing recycled commodity prices and favorable government regulation. The number of firms in the Recycling Facilities industry is expected to rise at an average annual rate of 4.4% to 1,096 in the five years to 2012. Even so, the two largest players in the industry, Waste Management Inc. and Republic Services Inc., account for a significant portion of the industry’s total revenue.
The next five years are set to be brighter for the industry. Consumers will increasingly demand products made with recycled goods. Also, higher levels of government regulation will benefit the industry by pushing potential downstream customers to use recycled goods in manufacturing processes. This trend is expected to boost the overall market for recycled goods and help stabilize revenue volatility. However, consolidation will likely continue in the next five years as integrated waste companies seek to add recycling to their portfolios. These trends will push revenue growth upward during the next five years. In the five years to 2017, revenue is expected to grow at a moderate pace. For more information, visit IBISWorld’s Recycling Facilities in the US industry report page.
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IBISWorld industry Report Key Topics
This industry operates material recovery facilities that separate and sort recyclable materials from nonhazardous waste streams (i.e. garbage). Firms also sort commingled recyclable materials, such as paper, plastics, used beverage cans and metals into distinct categories. This industry does not include municipalities and other government bodies that directly provide these services to the public.
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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