More clients will perform locksmithing services themselves, limiting industry growth
Los Angeles, CA (PRWEB) May 04, 2013
While demand will strengthen in the next five years, external competition from large security companies will limit revenue growth; furthermore, consumers will increasingly perform simple industry-related services themselves, hampering growth. For these reasons, industry research firm IBISWorld has added a report on the Locksmiths industry to its growing industry report collection.
The Locksmiths industry depends on the health of the US housing market. When the residential market crashed in the late 2000s, demand for industry services did as well, with revenue falling 11.7% in 2009 alone. While a slight recovery occurred in 2010, revenue declined again in 2011 and 2012 because residential construction and existing home sales continued to fall. In 2013, industry revenue is expected to decrease 2.2% to $1.57 billion, despite some recovery in the housing market. “Locksmiths will continue to reduce service prices to capture clients,” IBISWorld industry analyst Dale Schmidt says. They will also face pressure as potential clients install and perform locksmithing services themselves. Overall, revenue is estimated to fall at an annualized rate of 3.2% in the five years to 2013.
The Locksmiths industry includes employers and nonemployer companies, with the number of these enterprises totaling 15,392 in 2013. While this number has increased at an average annual rate of 1.1% during the past five years, the number of employer companies specifically has actually fallen during the period. “This decline occurred because the weak demand environment forced many companies out of business; however, small one-person operators have grown due to an increase in self-employed people during the past few years,” Schmidt says. In the face of weak demand, employer companies cut workers to reduce costs, and many companies simply exited the industry. Because of these factors, concentration in this industry is extremely low, and there are currently no major players in the industry. The low concentration arises due to the lack of gains made through economies of scale.
Demand for industry services is expected to strengthen over the next five years, aided by the long-anticipated recovery in the housing market and continued US economic growth. Nevertheless, industry revenue growth will be hampered by ongoing external competition, as large security companies supply industry-related services and more consumers perform simple household services themselves. In general, revenue will continue growing in 2014 and the following years as accelerated demand trumps the negative effects of external competition. Over the five years to 2018, revenue is forecast to increase. For more information, visit IBISWorld’s Locksmiths in the US industry report page.
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IBISWorld industry Report Key Topics
This industry performs installation, repair, rebuilding and adjusting services for security systems, as well as lock management of keying and key control systems. Companies also sell mechanical or electronic locking devices, safes and security vaults.
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.