Los Angeles, CA (PRWEB) September 14, 2012
The Concrete Reinforcing Bar Manufacturing industry produces fabricated bar joists and concrete reinforcing bars that are used ubiquitously throughout the residential and commercial construction industries. Following a few dismal years at the height of the recession, industry revenue is expected to increase 4.1% to $12.0 billion in 2012, thanks to an uptick in residential and commercial construction activity. Nevertheless, “demand has been bleak for most of the past five years,” says IBISWorld industry analyst Nima Samadi. “In the wake of the subprime mortgage collapse and subsequent recession, residential and commercial construction activity plummeted, significantly reducing the demand for industry goods.” As such, industry revenue is expected to decline at an average annual rate of 7.3% in the five years to 2012.
Along with revenue, Concrete Reinforcing Bar Manufacturing industry profitability has taken a hit over the past five years, as key input prices, such as steel, have increased. In times of high demand, industry firms would normally pass the additional costs on to customers, but with weak demand from the construction sector, companies were forced to lower their markups. Import penetration has also negatively affected profitability during the five-year period. “Emerging economies such as China and Mexico, which together account for nearly half of all industry imports, enjoy more relaxed labor and environmental standards than US manufacturers,” says Samadi. “Therefore, they can produce and offer their goods at lower costs. This fact has placed a tremendous amount of pressure on domestic manufacturers, which must either lower their prices or risk losing business to lower-cost foreign importers.” To offset price reductions, firms consolidated to cut costs. Consequently, the number of industry establishments fell at an average annual rate of 5.8% to 1,637 over the period. The five years ending in 2012 have been marked by a moderate rise in market share concentration. The increase in concentration is primarily due to larger companies expanding through mergers and acquisitions, as well as smaller businesses being forced out during the recession. Looking ahead, industry concentration is expected to grow over the next five years, fueled mainly by the acquisitions of larger companies, such as The Nucor Corporation and Commercial Metals Company. While smaller operators will enter the market, they will likely be bought out by larger companies as they expand.
Despite the doom and gloom of the past five years, the industry is projected to grow as construction activity picks up and economic conditions improve. Demand from infrastructure-related construction is expected to pick up as well, with government funding for highways set to increase through 2017. For more information, visit IBISWorld’s Concrete Reinforcing Bar Manufacturing in the US industry report page.
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IBISWorld industry Report Key Topics
This industry produces structural metal products, such as concrete reinforcing bars (rebars) and fabricated structural metal bar joists. Rebars are forged steel used in concrete to give structural tension strength to otherwise weak concrete. Rebar manufacturing is done in a factory using computerized machines to straighten, cut and bend the steel. Once the bar is loaded onto the manufacturing machinery, it is a highly automated process.
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Globalization & Trade
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