Downstream manufacturers will use more recycled goods, benefiting the industry
Los Angeles, CA (PRWEB) March 29, 2013
The Recycling Facilities industry, which sells recycled commodities and finished goods to customers, has performed well overall in the five years to 2013, with revenue expanding at an estimated average annual rate of 3.3%. According to IBISWorld industry analyst Deonta Smith, “Although the recession reduced consumer demand for products in general, demand for products manufactured with recycled goods has risen overall during the past five years due to shifts in consumer preference toward products that are perceived as environmentally friendly.” Therefore, manufacturers of products made with recycled materials have demanded more recycled commodities from wholesalers, aiding demand for recycling facilities, in turn. Despite substantial revenue gains during the past five years, recycled commodity prices declined considerably during the recessionary period; revenue consequently dropped 21.4% in 2009 as a result slumping selling prices and consumption. Recycled commodity prices have since rebounded, however, prompting an estimated 6.0% jump in industry revenue to $5.9 billion in 2013.
During 2009, revenue volatility became a concern for players in the Recycling Facilities industry. Many participants, such as Waste Management and Republic Services, consolidated operations to become more stable and achieve greater economies of scale, increasining market share concentration in this fragmented industry. Ultimately, though, increased consolidation has not offset growth in the number of players. “More firms have entered the industry since the recession amid growing recycled commodity prices and favorable government regulation,” says Smith. The number of firms in the industry has risen strongly over the past five years, keeping the industry in a growth phase.
The next five years are set to be bright for the industry. Consumers will increasingly demand products made with recycled goods. Also, higher levels of government regulation will benefit the industry by pushing potential downstream customers to use recycled goods in manufacturing processes. This trend is expected to boost the overall market for recycled goods and help stabilize revenue volatility. Subsequently, market share concentration will likely decrease in the next five years as integrated waste companies seek to add recycling to their portfolios. These trends will push revenue growth upward during the next five years. For more information, visit IBISWorld’s Recycling Facilities in the US industry report page.
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IBISWorld industry Report Key Topics
This industry operates material recovery facilities that separate and sort recyclable materials from nonhazardous waste streams (i.e. garbage). Firms also sort commingled recyclable materials, such as paper, plastics, used beverage cans and metals into distinct categories. This industry does not include municipalities and other government bodies that directly provide these services to the public.
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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