Slow growth in residential construction and home prices has hurt industry revenue
Los Angeles, CA (PRWEB) February 26, 2013
The Moving Services industry has contracted over the past five years as a result of the housing market collapse and slow economic recovery. Housing starts and home sales slowed, and demand for moving services ground to a halt due to the lack of new homes on the market. Plunging mortgage rates were insufficient in stimulating demand as unemployment shot up and disposable income deteriorated. Consequently, in the five years to 2013, industry revenue is expected to decline an average 2.9% per year to $14.6 billion. In 2009, the housing market crisis hit the industry particularly hard, with housing starts and the house price index falling 35.6% and 11.4%, respectively. “Industry contraction was partly mitigated by existing home sales growth as many households moved to cheaper housing,” says IBISWorld industry analyst David Yang. “Revenue only fell 4.6% over the year.” However, the depressed real estate market and stagnant economic growth continued in 2010, and revenue declined about 17.6%.
The Moving Services industry showed signs of recovery in 2012, as favorable Federal Reserve policies allowed for a further drop in mortgage rates. Over the year, lowered interest rates and accelerating economic growth fueled home sales and housing starts, which in turn stimulated demand for moving services. These trends spurred revenue growth of about 8.8% in 2012. “In 2013, mortgage rates are expected to rise and economic growth is estimated to slow, leading to a more modest revenue increase of 1.6% for the industry,” adds Yang. “Nonetheless, profitability has considerably improved since 2008 as firms cut operating costs by reducing the labor force and restructuring operations.” The industry has a low level of market share concentration; most industry firms are small operators that participate in this industry as agents or subcontractors of larger companies or as local moving companies. Over the past five years, market share concentration has declined. Although large firms like major players UniGroup, Sirva and Atlas World Group fared better during the recession, these national operators had to scale down operations to focus on profitable businesses. As a result, the market share of very large firms has declined since 2008, contributing to a lower level of concentration in this industry.
Over the next five years, the recovering housing market will prove beneficial for industry operators. Although mortgage rates are projected to rise as the economy recovers, falling unemployment and rising disposable income will stimulate demand for housing. As a result, housing starts and home sales are anticipated to grow strongly from 2013 to 2018, leading to increased demand for moving services. For more information, visit IBISWorld’s Moving Services in the US industry report page.
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IBISWorld industry Report Key Topics
Companies in this industry provide moving and relocation services, including local, long-distance and international trucking and shipping of used household, institutional and commercial goods, furniture and equipment. Industry firms often provide incidental packing and storage activities as well.
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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