Downstream demand is expected to grow over the next five years as the economy continues to rebound.
Los Angeles, CA (PRWEB) November 19, 2013
Over the five years to 2013, the Wire and Cable Manufacturing industry faced steep declines in demand due to the recession domestically and in the United States. According to IBISWorld Industry Analyst Caitlin Newsom, “Industry revenue fell at an average annual rate of 5.1% to $1.9 billion over the past five years, primarily attributable to the huge 24.5% plummet in revenue in 2009, due to falling downstream demand and plunging exports, which resulted from the recession in Canada and the United States, a key importer of industry products.” The United States accounts for over three-fourths of industry exports, causing declines in US demands to decrease industry demand. During the recession, construction activity faltered, decreasing demand for building wire and cable. Additionally, telecommunications decreased their demand for communications cable. Revenue is estimated to dip 0.5% over 2013, due to demand from construction also falling 1.4% over the year. Imports have also constrained Wire and Cable Manufacturing industry demand as rising import penetration has decreased industry revenue.
Additionally, profit margins suffered over the past five years as revenue fell and input costs rose. The price of copper, a key input for wire and cable, rose over the past five years. Industry operators passed on some of the input price increases to customers in the form of higher product prices. However, the competition in this industry forced operators to keep prices as low as possible and absorb most of the rising input prices, thus cutting into profit margins.
However, as the economy continues to rebound, industry demand has been rising. Revenue is estimated to rise over the five years to 2018. Downstream demand is expected to grow over the next five years as the economy continues to rebound. Additionally, telecommunication companies are expected to continue switching from traditional communications cable to the faster fiber optic cable, boosting industry demand. “Construction activity is expected to continue growing over the next five years due to the economy continuing to recover, boosting demand for building wire and cable,” says Newsom. Exports are also expected to grow over the next five years thanks to the United States' economy recovering from its recession, boosting foreign demand for industry products.
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IBISWorld industry Report Key Topics
The Wire and Cable Manufacturing industry insulates fibre-optic cable and manufacture insulated nonferrous wire and cable from nonferrous wire drawn in other establishments.
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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