Growth will let up slightly, as fears about rising crime and stricter laws subside
Los Angeles, CA (PRWEB) November 03, 2013
The Guns and Ammunition Manufacturing industry has grown strongly during the five years to 2013. The industry was in decline until the start of the decade, when the September 11 terrorist attacks renewed demand for industry products. In addition, possible tightening of gun laws combined with fear of a potential rise in crime contributed to unprecedented industry growth in the five years to 2013. According to IBISWorld Industry Analyst Maksim Soshkin, “Over the period, revenue is expected to grow at a rate of 8.4% per year on average, with revenue increasing 20.2% in 2013 to $14.7 billion.”
During the past five years, the wars in Iraq and Afghanistan ushered in a substantial increase in the amount of military spending by the government, resulting in an increase in purchases of the industry's military-related products. Enduring conflicts in these regions and US troop surges caused the amount of revenue earned from the sales of these products to grow. However, the recent withdrawal of troops from the Middle East and budget cuts have offset many of these gains. The budgets of federal, state and local law enforcement agencies also grew during the five years to 2013 due to the sustained threat of terrorism. Meanwhile, civilian gun sales spiked because of concerns about potential law changes by the Obama administration and fears over a possible increase in crime resulting from the poor economy.
With demand for industry products surging over the past five years, domestic manufacturers have been unable to completely satisfy domestic demand, so consumers have increasingly relied on imports to fill that gap. In fact, over the five years to 2013, imports grew at an average annual rate of 9.3% to $3.9 billion. “This trend is expected to continue in the future, with net exports declining in the five years to 2018,” says Soshkin. Despite the industry growth that occurred from 2008 to 2013, growth is expected to moderate over the next five years due to subsiding fears about potential rising crime rates and gun law changes and continued defense spending cuts. Consequently, in the five years to 2018, revenue is projected to grow.
Market share concentration is medium in this industry and has declined over the five years to 2013. The major companies in this industry include Alliant Techsystems Inc., General Dynamics Combat Systems, BAE Systems and Freedom Group. The Guns and Ammunition Manufacturing industry consists of a large number of small to medium firms. The wide variety of products produced in this industry and the diverse buying markets make it difficult for individual firms to grab a large portion of industry's entire market share.
For more information, visit IBISWorld’s Guns and Ammunition Manufacturing in the US industry report page.
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IBISWorld industry Report Key Topics
The Guns and Ammunition Manufacturing industry manufactures small arms (including shotguns, rifles, revolvers, pistols, machine guns and grenade launchers), small arms ammunition, other ammunition and ordnance and accessories.
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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