Growth will be driven by increased manufacturing demand.
Los Angeles, CA (PRWEB) November 25, 2013
Following years of solid growth, the Metal Stamping and Forging industry faced challenges during the recession. The economic downturn created anemic demand conditions for the industry's major markets, which include the automotive, aerospace and agricultural machinery manufacturing industries. With credit frozen and industrial production falling sharply, demand from these markets plummeted, causing revenue to drop in 2009. For example, Boeing's decision to delay production of its new 787 aircraft in light of weak economic conditions contributed to the overall drop in industry demand from the aerospace sector. However, conditions improved dramatically in 2010 and 2011, as the US manufacturing sector revived along with rising consumer confidence. Furthermore, strong international demand for downstream products bolstered revenue. As downstream markets and the economy recover, the industry is expected to grow in 2013, marking annualized growth in the five years to 2013.
Concentration within the Metal Stamping and Forging industry is low. IBISWorld estimates that, in 2013, the top four firms (Alcoa Incorporated, Precision Castparts Corporation, Allegheny Technologies Incorporated and Grede Holdings LLC) account for more than 20.0% of total revenue (see IBISWorld report 33211 for major player market shares). The industry is highly fragmented in that many small and midsize businesses operate within the industry, with over half of operators employing fewer than 20 people and a significant amount of companies employing between 20 and 99 people.
According IBISWorld Industry Analyst Kerry Coughlin, “Due to rising demand, over the past few years, industry profitability has increased.” The industry's growth and profit margins in the next five years will be driven by increased manufacturing demand. Producers will benefit most by supplying high growth and rising profit margin sectors, such as the aerospace market, which requires highly specialized parts. Operators will also benefit from the adoption of new alloys to develop forges and castings with enhanced qualities, such as lower weight, greater strength and resistance to corrosion and temperature. The industry will also experience continued growth in the automotive industry, which is a major buyer due to the custom metal forging used in the production of vehicles. Additionally, demand from agricultural machinery will remain strong. Consequently, “in the five years to 2018, revenue is expected to increase,” says Coughlin.
Looking ahead, unpredictable weather conditions, which affect demand for agricultural machinery, can hurt this industry's demand. Also, despite relatively low international trade, the industry was still affected by the globalization of downstream industries. As US manufacturers increase offshoring operations to countries with cheaper labor, demand for US industry products will decrease. Consolidation is also anticipated to continue in the next five years, with the number of enterprises declining in 2018.
For more information, visit IBISWorld’s Metal Stamping & Forging in the US industry report page.
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IBISWorld industry Report Key Topics
Manufacturers in the Metal Stamping & Forging industry produce forgings, metal custom roll forming products, stamped and spun products and powder metallurgy products. Forging is the process by which metal is shaped using compressive force in hot, warm or cold temperatures. Stamping is the method used to form sheet metal into a shape using a press. Furthermore, powder metallurgy blends and compresses fine powdered materials into a desired shape. This industry excludes the stamping of coins, cans and automotive.
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.