Conditions have improved as the resilient Chinese economy stimulates global mining.
Los Angeles, CA (PRWEB) October 19, 2013
Underpinned by booming global demand for mineral and energy commodities, the Mining, Oil and Gas Machinery Manufacturing industry is estimated to grow at an annualized rate of 2.7% during the five years to 2013. “Rising resource prices led mining and oil industries to expand existing production and increase exploration, resulting in strong demand for machinery and equipment,” according to IBISWorld Industry Analyst James Crompton. In 2009, following the financial crisis, constrained credit conditions and weaker commodity prices resulted in a sharp downturn in energy and mineral exploration and production, leading revenue to drop 16.9%. However, subsequent gains are expected to offset previous losses, as emerging market demand and hydraulic fracturing (fracking) encourage further investment into machinery. In 2013, IBISWorld estimates revenue growth of 5.3%, to total an estimated $27.8 billion.
International trade is prominent in this industry, with exports expected to account for about 51.6% of revenue in 2013. Historically, the industry exhibited a trade surplus, which indicates that downstream markets value product quality more than price. While imported goods from China may be cheaper thanks to production efficiencies, downstream markets are willing to pay for quality up front if it will save them money in the long run. Furthermore, while exports as a share of revenue have been in a downward trend, exports to Mexico and Canada have increased at annualized rates of 28.0% and 4.4%, respectively. Between 2011 and 2012, exports to Mexico more than doubled. As the United States seeks to lessen their dependence on Middle Eastern oil, these neighboring countries will provide great opportunities due to their access to natural resources and low trade barriers.
IBISWorld projects continued growth through 2018, with rising commodity prices and economic recovery encouraging customers in downstream sectors to resume spending on machinery and equipment. “Heightened global efforts to discover new oil and gas reserves will further stimulate industry sales,” says Crompton. In addition, shale gas, which is a type of natural gas produced through fracking sedimentary rock, will play a key role in the growth of the domestic energy industry as domestic groups address concerns about the environmental impacts and feasibility to supply the United States with domestic energy.
For more information, visit IBISWorld’s Mining, Oil and Gas Machinery Manufacturing in the US industry report page.
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IBISWorld industry Report Key Topics
Companies in the Mining, Oil and Gas Machinery Manufacturing industry manufacture oil and gas field equipment and underground mining machinery. Products include rotary and portable drilling rigs and parts; crushing, pulverizing, screening and mineral processing machinery; and derricks, substructures and related accessories. Parts are included, but support services are excluded.
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.