As industrial production ground to a near standstill during the recession, demand tanked.
Los Angeles, CA (PRWEB) August 29, 2012
The Material Handling Equipment Distributors industry distributes a range of machinery and equipment, such as conveying equipment, hoists, cranes, forklifts, industrial truck and tractors. Capital investment into this industry's products traditionally depends on downstream demand from key markets such as manufacturers and other wholesalers, whose purchase habits are in turn determined by industrial production (i.e. capacity utilization), the age of existing machinery and business confidence. During the five years to 2012, three distinct periods have characterized this industry: substantial growth leading up to 2007; recession-induced declines from 2007 to 2009; and ongoing recovery since 2010, according to IBISWorld industry analyst Nima Samadi.
Overall, Material Handling Equipment Distributors industry revenue is expected to decline at an annualized rate of 3.1% during the five years to 2012. With the onset of the recession, industry demand soured because corporate profit fell and credit dried up. These recessionary conditions reduced downstream expenditure on new and replacement material handling equipment, thereby crippling growth in distributor volumes. Rebounding revenue since 2010 is expected to continue, with 1.3% growth in 2012 to total $21.1 billion, Samadi says. “Demand from rebounding manufacturing, wholesale and construction sectors will drive much of this growth,” he says.
While many of the industry's recent shortfalls can be attributed to the Great Recession, some factors have been more industry-specific. In particular, private investment in industrial equipment and machinery took double-digit dips in 2008 and 2009. Likewise, private investment in manufacturing structures took a nosedive in 2010 and 2011. While demand from other key areas managed to remain relatively solvent, the industry still registered a five-year decline. Rebounds off recessionary lows will characterize all of the industry's key drivers during the next five years. Technological advances will also spur growth, particularly with regard to more energy-efficient material handling equipment. Consequently, revenue is forecast to grow through 2017. The Material Handling Equipment Wholesaling industry is highly fragmented, but has become slightly less so over the past five years. The market's large size and dependence on geographic dispersion contribute to a low level of concentration. Firms can offer some or most of the products covered in the industry's definition, but few provide all, thus allowing for new entrants to specialize in a niche product. For more information, visit IBISWorld’s Material Handling Equipment Distributors in the US industry report page.
Follow IBISWorld on Twitter: https://twitter.com/#!/IBISWorld
Friend IBISWorld on Facebook: http://www.facebook.com/pages/IBISWorld/121347533189
IBISWorld industry Report Key Topics
This industry distributes material handling equipment, usually on a wholesale basis. Products include conveying equipment, hoists, cranes, forklifts and industrial trucks and tractors. Some of the larger firms are vertically integrated, from production through distribution.
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.