Rising demand from the industry's major markets will bolster both profit and revenue
Los Angeles, CA (PRWEB) August 11, 2013
The Transmission Line Construction industry has experienced strong growth over the past five years. This industry was unscathed during the recession because downstream electric power and telecommunications firms, as well as government agencies, increased their infrastructure investments, says IBISWorld industry analyst David Yang. Aging electricity generation and transmission facilities required maintenance and upgrades. Growing consumer demand for high-speed data also fuelled telecommunications infrastructure construction. Over the five years to 2013, demand from the electric power sector grew at an annualized rate of 1.7%, while demand from the telecommunications sector increased an average of 4.5% per year. As a result, IBISWorld expects industry revenue to increase at an annualized rate of 7.0% to $19.2 billion over the period. However, in 2013, revenue is estimated to slightly decrease 2.4%. Government expenditures slowed down over the past two years, causing construction activities to moderately contract. Private-sector infrastructure investments also experienced a slightly lull due to high levels of construction activity in recent years.
IBISWorld estimates that the Transmission Line Construction industry has a low level of market share concentration. Electric power and telecommunications infrastructure construction is subject to provincial and regional government permits and regulations. Typically, small regional contractors that have an established working relationship with local government regulators can more easily operate in this industry. As a result, while major players like Quanta Services receive large national or provincial transmission contracts, local work is often subcontracted out to smaller firms, continues Yang. Over the past five years, market share concentration has increased, mostly due to Quanta's expansionary strategy. Quanta Services, a major infrastructure contractor based in the United States, used its scale and capital resources to win electric power infrastructure contracts.
The contraction will be temporary, however, and strong infrastructure investments over the next five years will fuel revenue growth. Electric power infrastructure construction will accelerate in particular as coal-fired facilities are gradually phased out. New renewable energy and natural gas power plants will need to be constructed to replace coal, and transmission lines must be installed to link generation facilities to the power grid. Additionally, demand for data will continue to grow, spurring new investments in fibre-optic networks and other high-speed data infrastructure. Telecommunications service providers will turn to industry firms to provide much-needed cable and fibre installation services. For more information, visit IBISWorld’s Transmission Line Construction in Canada industry report page.
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IBISWorld industry Report Key Topics
This industry provides design, construction, maintenance and repair services for electric power and telecommunications infrastructure, such as transmission lines, towers, cables, generating facilities, electricity substations and other related infrastructure.
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 and Canadian 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.