Renewed downstream demand will help the industry remain fairly stable
Los Angeles, CA (PRWEB) October 17, 2013
The Synthetic Fiber Manufacturing industry, which supplies fiber made from using petrochemicals to producers of apparel, plastics and other consumer goods, has endured considerable challenges in the five years to 2013. Purchases of synthetic fibers, which are inputs for products such as clothing and home furnishings, dropped as Americans drastically reduced spending on nonessential items during the recession. According to IBISWorld Industry Analyst Leah Goddard, “As consumer spending started to regain momentum in 2010, downstream manufacturers increased production and thus purchases of synthetic fibers, allowing the Synthetic Fiber Manufacturing industry to achieve dramatic revenue growth that more than offset the previous drop.” Consequently, over the five years to 2013, revenue is anticipated to increase at an annualized rate of 1.9% to $8.5 billion.
Before the economic downturn, the Synthetic Fiber Manufacturing industry was already contracting due to its dependence on a declining consumer base as US apparel, carpet and textile mills gradually move offshore. When the recession started in 2008 and continued into 2009, the dramatic reduction in demand from these downstream industries caused revenue to drop 14.4% in 2008 and 26.8% in 2009. Profit also declined as input prices spiked for raw materials such as oil and wood pulp, increasing costs. “Although industry revenue grew 32.3% in 2010 and 12.2% in 2011, this growth has less to do with industry expansion and more to do with the rise in housing starts and disposable income levels, which drive demand for home furnishings and other consumer products,” says Goddard. Thus, revenue is expected to slow in the latter part of the five-year period due to decelerating production in downstream industries and rising input costs. As a result, IBISWorld estimates industry revenue to fall 1.2% in 2013.
Over the five years to 2018, the industry will stay fairly stable. Demand from carpet mills and plastics and rubber products manufacturers will modestly increase, offsetting declining demand from apparel manufacturers. While some synthetic fiber manufacturers will offshore operations to countries with cheaper labor costs and less rigorous regulations, others plan to expand production in the United States. Exports will maintain their current share of industry revenue, and imports will retain their current portion of domestic demand. For these reasons, the Synthetic Fiber Manufacturing industry's revenue is projected to stay fairly steady in the five years to 2018.
For more information, visit IBISWorld’s Synthetic Fiber Manufacturing in the US industry report page.
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IBISWorld industry Report Key Topics
Th Synthetic Fiber Manufacturing industry produces cellulosic and noncellulosic fibers and filaments in the form of monofilament, filament yarn, staple or tow. Key cellulosic organic fibers and filaments include rayon and acetate. Noncellulosic fibers and filaments include acrylic, nylon, polyester and spandex. This industry does not include fiber, yarn or thread mills, thread manufacturers of any other fibers, or manufacturers of hemp yarn.
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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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.