Increased trade activity and federal funding for transportation have kept the industry growing
Los Angeles, CA (PRWEB) August 20, 2013
After a major recessionary hiccup in 2009, in which revenue plummeted 10.8%, the Railroad Track Construction industry rebounded strongly in 2010 and has been growing ever since. In the five years to 2013, revenue is expected to grow at an annualized rate of 1.0% to $4.3 billion, including a 4.3% increase in 2013 alone. “Higher shipment volumes of manufactured goods, as well as an increasing volume of imported products into the United States, has helped fuel the industry's post-recession growth,” according to IBISWorld industry analyst Sean Windle. Many of these goods are transported via freight train; as existing rail lines are used more frequently, the demand for repair and maintenance-related construction work has increased. Additionally, while most of the construction sector remained under duress in 2010 and 2011, railroad track construction firms enjoyed solid revenue growth. Federal spending programs, like the American Recovery and Reinvestment Act of 2009, allocated billions of dollars for railroad track construction and other transportation initiatives, buoying industry revenue.
Despite the Railroad Track Construction industry's overall positive revenue growth, weaker demand conditions fueled an increasingly competitive environment, in which operators lowered prices to secure bids for public and private projects. The industry has a medium level of concentration: The top four companies in the industry account for more than two-thirds of total industry revenue in 2013. Industry concentration has increased as major players (e.g. Bechtel Group Inc., Kiewit Corporation, Fluor Corporation and Skanska AB) have grown rapidly by securing high-value track construction contracts. “Market share concentration is expected to continue to increase in the next five years, as larger companies leverage their economies of scale to lower prices and win bids for track construction contracts,” says Windle.
In the five years to 2018, industry growth is forecast to accelerate. Several different factors will contribute to this strong revenue growth, including more investments for rail transportation projects at the local and state government level and increasing demand for the shipment of manufactured and imported goods via rail. Additionally, several high-speed rail projects are set to break ground over the next five years, which will further bolster industry demand.
For more information, visit IBISWorld’s Railroad Track Construction in the US industry report page.
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IBISWorld industry Report Key Topics
This industry constructs railway track, railway ties, bedding and other infrastructure related to railroads. Contractors perform new work, reconstruction and repairs. This industry also includes construction management firms and special trade contractors that construct rail track and transit systems.
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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