Reduced federal funding and government investment hurt industry performance.
Los Angeles, CA (PRWEB) December 15, 2013
The Airport Terminal Construction industry comprises companies that engage in new terminal construction, reconstruction and additions. This industry also includes construction management companies as well as special trade contractors that assist larger businesses in the construction process. Over the five years through 2013, the industry has grown due to high levels of federal government funding. “While the majority of the US construction sector was disrupted by poor consumer and business sentiment, which led to plummeting private investment, the Airport Terminal Construction industry continued to grow,” according to IBISWorld Industry Analyst Jeremy Edwards. While revenue increased by only 0.8% in 2009 as a result of the recession, federal funding for transportation prevented deep losses. However, the industry significantly declined in 2011 because federal funding reduced, local and state government investments continued to fall and a shutdown of the Federal Aviation Administration hurt industry performance. Nonetheless, overall, industry revenue is projected to grow at an average annual rate of 2.7% to $8.4 billion over the five years through 2013, which includes a 4.5% increase in 2013 alone, as high federal funding for transportation subsists and terminal modernization work drives industry growth.
However, over the past five years industry profitability has declined. “Nevertheless, new companies have entered the industry as subcontractors seek work on new projects,” says Edwards. Consequently, industry operators are projected to increase at an average annual rate of 3.4% to 4,612 companies, during the five-year period.
Over the next five years, the industry is forecast to continue its expansion. However, revenue is projected to fall in 2014, as federal funding for transportation declines an anticipated 5.7% in the same year, due to budget sequestration and general spending cuts by the US government. Despite this short-term drop in federal funding, the industry is expected to grow as these subsidies increase in the second half of the five-year period, local and state government investment resumes and private airlines invest in modernization projects with US residents taking more flights.
For more information, visit IBISWorld’s Airport Terminal Construction in the US industry report page.
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IBISWorld industry Report Key Topics
Operators in this industry constructs airport terminals, with contractors specifically engaging in new terminal construction, reconstruction and additions. This industry also includes construction management companies and special trade contractors that also participate in the building of airport terminals.
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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