Ongoing maintenance and expansion of existing gas pipelines increased demand for valves
Los Angeles, CA (PRWEB) May 22, 2013
The performance of the Valve Manufacturing industry is highly dependent on production levels in key downstream markets including: chemical, petrochemical and petroleum-related industries; water and waste systems; power generation and utilities; and construction. The global economic downturn led to volatile demand from these markets over the past five years, says IBISWorld industry analyst Kevin Boyland, “with declining demand for valves in some markets largely offset by increases in demand from others.” As a result, over the five years to 2013, revenue is expected to remain relatively unchanged, declining at a marginal annualized rate of 0.1% to $1.8 billion.
The petroleum production and pipeline transmission market – a key buyer of high-pressure valves for oil and gas drilling, producing, gathering and transportation – performed well over the past five years, increasing this market's demand for valves. Increased demand from this market was due to rising oil prices stemming from increased demand for oil and petroleum products around the globe. Additionally, ongoing maintenance, repair and expansion of existing pipelines and refineries increased demand for valves. However, this increased demand “was offset by declining demand from the chemical manufacturing sector,” Boyland says, “which experienced production declines in end markets like automotive and paper manufacturing.”
In 2013, decreased pipeline and residential construction activity are expected to bring downstream demand for valves from the construction and oil and gas production markets to a halt, offsetting robust export growth that year. However, the Valve Manufacturing industry is poised for solid growth over the next five years as the global economy improves and foreign markets demand specialty valves as they expand their infrastructure. Driven by export growth, revenue is forecast to grow over the five years to 2018.
Many industrial and fluid power valves have become standardized, making pricing a primary basis of competition in the industry. Unfortunately, this development favors foreign manufacturers that enjoy lower costs of production. As a result, imported goods satisfy a large share of domestic demand. To stay competitive, firms are consolidating to grow their economies of scale and reduce their cost per unit. The industry's heavy reliance on international trade, particularly with the United States, has also increased the market share of firms with extensive operations over the past five years. Valve manufacturers that maintain multiple locations in both Canada and the United States can more easily participate in international trade and can easily move merchandise back and forth from their national and international establishments. Current industry leaders include Pentair Ltd. and Emerson Electric Co. For more information, visit IBISWorld’s Valve Manufacturing in Canada industry report page.
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IBISWorld industry Report Key Topics
This industry manufactures a variety of industrial and fluid power valves, hose fittings and related trimmings. Additional products include metal and plastic plumbing fixtures, such as faucets, flush valves and showerheads.
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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