Stagnant electricity consumption and electricity prices hampered growth.
Los Angeles, CA (PRWEB) October 15, 2013
The Transmission Line Construction industry performed poorly during the past five years due to the recession, which halted demand for new electricity and telecommunications infrastructure. While the growing push for renewable energy and government incentives like the American Reinvestment and Recovery Act (ARRA) of 2009 helped mitigate declines, stagnant electricity consumption and electricity prices ultimately hampered industry performance. In the five years to 2013, revenue is estimated to fall at an average rate of 2.7% per year to $51.3 billion.
During the recession, demand contracted in a number of segments. For example, private nonresidential construction, which includes telecommunication infrastructure, declined 21.1% during 2009. Consequently, industry revenue fell 16.7% over the same year. According to IBISWorld Industry Analyst David Yang, “While the ARRA moderately bolstered government funding and incentives for infrastructure investments, slow economic growth ultimately hampered demand for industry services.” In 2011, the growth of clean energy and high-speed data services renewed demand for transmission infrastructure construction. Industry revenue has since continued to grow, but the recovery has been slow, due to stagnant electricity prices and consumption. According to the Energy Information Administration, electricity prices contracted over the past two years. When electricity prices are low, downstream utilities have little incentive to invest in infrastructure. Furthermore, sluggish demand is expected through 2013, resulting in low revenue growth of 1.7%.
Over the next five years, this industry is forecast to return to growth, as downstream electricity and telecommunications firms resume infrastructure expansions. Moreover, consumer demand for high-speed data is anticipated to grow, boosting demand for transmission lines and wireless transmission towers. “Electricity consumption, electricity prices and renewable energy generation are also expected to increase, fueling demand for transmission lines,” says Yang. As existing power grids and telecommunications infrastructure age, demand for repair and maintenance services will also redouble. The recovery of local and state government budgets will also provide another avenue of funding for industry firms. Furthermore, market share concentration in this industry is low, with Quanta Services Inc. representing the largest major company.
For more information, visit IBISWorld’s Transmission Line Construction in the US industry report page.
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IBISWorld industry Report Key Topics
Industry operators in the Transmission Line Construction industry provide comprehensive design, construction, maintenance and repair services for electric power and telecommunication transmission infrastructure, including transmission lines, towers, cables and other utility structures. Moreover, industry enterprises include general contractors, design builders, civil engineers and other specialty contractors.
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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