Los Angeles, CA (PRWEB) September 10, 2012
If writing has gone out of style, the Art and Office Supply Manufacturing industry is feeling the effect. Computers, the internet, text messages and e-mail are all communication tools that do not require the use of pens, pencils or other writing and drawing supplies. The number of students in schools and colleges is growing slowly, but this market alone is not enough to support the industry. Furthermore, younger generations are more comfortable with electronic forms of writing and communicating than their older peers. Additionally, businesses throughout the country have moved toward conducting operations online and are demanding fewer industry products. “Cheap imports are also putting pressure on domestic manufacturers,” says IBISWorld industry analyst Kevin Boyland. As a result of these trends, industry revenue is expected to decline 2.6% per year on average during the past five years to $3.4 billion, including a drop of 3.3% in 2012.
The industry's profit margin is contracting as a result of diminishing domestic demand, intense price competition and external competition from substitute technologies and imports. Consumers are not buying office supplies as much as they used to and, amid a price-competitive environment, domestic producers have been unable to pass operational cost increases on to downstream wholesalers and retailers. According to Boyland, “this factor has cut into firms' bottom lines and forced them to cut staff numbers, lower production levels and, in some cases, exit the industry.” During the five years to 2012, the number of industry firms is expected to decrease at an annualized rate of 3.6% to 560. Major players in the Art and Office Supply Manufacturing industry, including Newell Rubbermaid Inc., ACCO Brands Corporation and Crayola LLC, have staved off major contractions in recent years but suffered greatly during the recession.
As firms deal with falling demand and high competition, downsizing and consolidation are expected to continue throughout the next five years. Over the five years to 2017, industry revenue is expected to contract at a moderate pace. This decline is expected to continue to put downward pressure on prices charged to downstream customers, pressuring profitability. On the upside, price decreases will also make industry products more competitive against cheap imports. Companies are also expected to improve their products and use newer, environmentally friendly technologies to compete in the higher-margin products market. However, these attempts will likely only improve profitability; the volume of sales of art and office supplies is expected to continue declining as electronic communication cements itself as the primary way consumers and businesses write and communicate. For more information, visit IBISWorld’s Art and Office Supply Manufacturing in the US industry report page.
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IBISWorld industry Report Key Topics
This industry purchases ink, wood, plastics and other materials to manufacture a range of art and office supplies. Industry products include pens, pencils, art goods, staplers, marking devices and carbon paper. End customers include businesses, consumers, wholesalers and office-supply retailers.
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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