New product development will boost demand for medical instruments and supplies.
Los Angeles, CA (PRWEB) November 23, 2013
The $91.7-billion Medical Instrument and Supply Manufacturing industry is a mature, consolidating industry with relatively high profit margins; as such, the industry was largely resilient during the recession, and IBISWorld expects its revenue to continue growing in coming years. Revenue is expected to rise 2.4% in 2013, in line with average annual growth of 1.5% over the five years to 2013. Increased public and private health spending, continued technological innovation and new product introductions have contributed to growing demand for medical instruments and supplies, and the industry has benefited from favorable demographic trends as well.
According to IBISWorld Industry Analyst Jocelyn Phillips, “The aging population requires more healthcare procedures, which necessitate medical instruments and supplies, and rising obesity and diabetes rates have boosted the need for devices that address these issues.” Moreover, the burgeoning home healthcare market has provided opportunities for new product development in the Medical Instrument and Supply Manufacturing industry.
The four largest companies have expanded during the past five years, and their market share will likely continue to grow through 2018. This growth is due in part to consolidation, as industry conglomerates acquired many small firms during the recession despite rising revenue. As a result, since 2008, the number of industry companies has declined 1.4% per year on average to 15,508. Consolidation has helped the industry sustain average profit margins of 10.7% of revenue, with larger companies able to achieve margins closer to 20.0% through their ability to control pricing.
“Favorable demographic and technological trends will continue to support product development and industry sales,” says Phillips. In the five years to 2018, IBISWorld expects industry revenue to grow. Healthcare reform will further drive demand for industry products, as an estimated 32.0 million Americans will gain access to health insurance coverage, boosting physician visits and the use of medical supplies. However, the newly enacted excise tax on the sale of medical devices will likely cut into operators' margins.
Although the long-term effect of the tax remains unclear, many companies are already preparing for additional costs by reducing jobs, slashing budgets and delaying expansion plans. At the same time, innovation and product development will introduce new products to market, buoying industry revenue in the coming years.
For more information, visit IBISWorld’s Medical Instrument and Supply Manufacturing industry in the US industry report page.
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IBISWorld industry Report Key Topics
The Medical Instrument and Supply Manufacturing industry primarily researches, develops and produces non-electronic medical, surgical, ophthalmic and veterinary instruments and apparatus, such as syringes, anesthesia apparatus, blood transfusion equipment, catheters, surgical clamps and medical thermometers. The industry does not manufacture electromedical and electrotherapeutic apparatus, laboratory instruments, X-ray apparatus, nonmedical thermometers or ophthalmic goods (such as contact lenses and eyeglasses).
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.