Recovery in housing starts and construction markets will benefit revenue growth
Los Angeles, CA (PRWEB) May 30, 2013
The Garage Door Manufacturing industry faced severe revenue declines during parts of the past five years. According to IBISWorld industry analyst Radia Amari, “The Great Recession, which began in 2008 and continued through 2009, was in part the result of the housing bubble burst.” Combined, these two events created an environment in which residential and commercial building, employment levels, consumer spending, and business and consumer confidence all dramatically declined. The Garage Door Manufacturing industry relies heavily on new residential and commercial construction for its revenue; in 2013, these two markets are expected to combine for over 65.0% of industry revenue. Therefore, when the economy deteriorated in 2008 and 2009, garage door manufacturers immediately felt the effects. In 2008 and 2009, industry revenue fell an estimated 4.4% and 25.7%, respectively. Over the five years to 2013, industry revenue will fall at an estimated annualized rate of 4.2% to $3.8 billion.
The drastic shifts in demand for garage doors, together with volatile raw material prices, caused many garage door manufacturers to exit the industry during the past five years. From 2008 to 2013, the number of industry companies fell at an estimated average annual rate of 0.1% to 706, dipping 4.5% in 2009 and 2.1% in 2010 then bouncing back. “However, conditions are improving for garage door manufacturers,” says Amari. In 2013, industry revenue is expected to jump 5.0%. As the industry is cyclical, improving economic conditions are providing a better operating environment for manufacturers. While the residential construction industry slowly began to rebuild in 2010, it did not experience significant positive revenue growth until 2012. The commercial building construction industry continued to feel the lingering effects of the recession through 2011, and it was not until 2012 that its revenue began to trend upward. Similarly, the Garage Door Manufacturing industry returned to revenue growth in 2011.
The Garage Door Manufacturing industry is characterized by several large national manufacturers and many smaller regional and local manufacturers; therefore, market share concentration is low. The two largest operators account for about 23.6% of total industry revenue in 2013. Most manufacturers operate locally and provide services to a small segment of the population. Nonetheless, market share has increased over the past five years because a number of companies were acquired during the recession. Larger companies are looking to expand their footprint in nearby areas, where they can add value and turn once-struggling operations into profitable ventures.
The next five years are likely to be promising for industry operators. From 2013 to 2018, industry revenue is projected to rise. The number of housing starts, demand from commercial building construction and demand for remodeling are all forecast to be on the rise. Additionally, raw material prices (e.g. steel and wood) will be more stable, which will improve industry profit margins.
For more information, visit IBISWorld’s Garage Door Manufacturing in the US industry report page.
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IBISWorld industry Report Key Topics
This industry includes establishments that primarily manufacture garage doors. Manufacturers of garage door openers and installers of garage doors are excluded from this industry.
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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