Demand from farmers and homeowners will rebound
Los Angeles, CA (PRWEB) August 05, 2013
Opposing factors have taken the Farm, Lawn and Garden Equipment Wholesaling industry for a spin during the past five years. After the housing bubble burst in late 2008 and the recession took hold, wholesalers were left with steeply declining revenue in 2009. According to IBISWorld Industry analyst Sally Lerman, “while revenue declines have since moderated, the industry continues to face significant pressures.” During the five years to 2013, revenue is anticipated to decrease at an annualized rate of 1.9% to $63.0 billion. This rate includes an expected 1.8% drop in 2013 as the increasing prevalence of wholesale bypass (i.e. when buyers source directly from manufacturers to cut costs) offsets stronger demand from the farming sector.
The industry is forecast to recover slowly but steadily through 2018. Demand from the farming sector will remain stable and demand from homeowners will rebound as credit conditions loosen, unemployment declines and home purchases increase. Private spending on home improvement is projected to grow at an average rate of 4.6% per year during the next five years, which indicates increased demand for lawn and garden equipment. Meanwhile, increased ethanol use, as mandated by quotas set in the 2005 Energy Policy Act and 2007 Energy Independence and Security Act, will fuel demand for capital investments in the farming sector. As such, revenue is anticipated to grow over the five years to 2018.
The Farm, Lawn and Garden Equipment Wholesaling industry has a medium level of market share concentration. During the past five years, the top two companies have increased their market power as their respective sales have grown faster than the industry's revenue. Brand recognition, far-reaching global operations and a diverse set of product offerings have bolstered growth and mitigated the negative effects of the economic recession. Smaller companies, on the other hand, do not have the same support system. As a result, many unprofitable players have exited this industry. Concentration also varies by type of wholesaler. Concentration among merchant wholesalers is low, while concentration among manufacturers' sales branches and offices is very high. Large, vertically integrated firms have consistently gained market share over the past five years. The two largest companies in the industry are Deere & Company, and CNH Industrial.
For more information, visit IBISWorld’s Farm, Lawn and Garden Equipment Wholesaling in the US industry report page.
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IBISWorld industry Report Key Topics
Farm, lawn and garden equipment wholesalers in this industry primarily purchase specialized machinery, equipment and related parts used in agricultural and consumer segment activities (e.g. lawn and garden). This equipment is then sold to downstream markets, namely farms and other wholesalers, that make the goods available to end consumers.
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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