A poor performance in motor vehicle manufacturing and related sectors will constrain demand for industry products.
Melbourne, Australia (PRWEB) November 07, 2013
Operators in the Machine Tool Wholesalers industry in Australia purchase goods from manufacturers then onsell them to clients. Most of the players in the industry are diverse wholesalers that specialise in a wide range of products, with machine tools comprising just one of their product segments. Industry revenue is forecast to grow at annualised 3.6% over the five years through 2013-14 to reach $3.06 billion. According to IBISWorld industry analyst Andrei Ivanov, “this growth is expected to be supported by strong demand from manufacturing industries with exposure to the mining sector”. Clients in other manufacturing industries are likely to have contributed significantly less to demand over the same period. In this sense, the Machine Tool Wholesalers industry is demonstrative of a two-speed economy. As investment in mining flattens out, industry revenue growth is expected to stagnate. In fact, industry revenue is forecast to decline by 1.0% in 2013-14.
The outlook for the industry is not so bright. This is expected to be a result of the traditional manufacturing industries once again becoming the key drivers of revenue. A poor performance in motor vehicle manufacturing and its related sectors will continue to exert pressure on demand for industry products. “However, construction is expected to partially support revenue growth,” says Ivanov. The industry is highly fragmented, with no major players and a low level of concentration.
Increasing import penetration in the Machine Tool and Parts Manufacturing industry is expected to cause wholesalers to source more products from overseas markets where manufacturing costs are generally cheaper. This should reduce purchasing costs and support profit margins in the future. The industry is currently facing several challenges as it adapts to the shift in the two-speed economy from mining to more traditional manufacturing. In particular, there is a looming threat of wholesale bypass, where clients purchase their products directly from the manufacturers. Some of the more successful operators in the Machine Tool Wholesalers industry may avoid engaging in a price war and instead focus on increasing their value proposition for their clients.
For more information, visit IBISWorld’s Machine Tool Wholesalers in Australia industry report page.
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IBISWorld industry Report Key Topics
This industry wholesales machine tools. Products include powered metalworking machinery, such as lathes, bores, drills, grinders, buffers, chamfers and polishers. Some of the firms are vertically integrated, from production through distribution.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Technology & Systems
Regulation & Policy
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