Profit margins fluctuated during the past five years due to high volatility in the world price of steel.
Los Angeles, CA (PRWEB) August 23, 2013
During the past five years, the Gasoline Pump Manufacturing industry’s performance fluctuated due to turbulent economic conditions. During the recession in 2009, rising unemployment caused consumers to have less disposable income. As a result, consumers drove their cars less frequently and made fewer trips to the gas station, causing a growing number of gas stations to shut down. Falling demand for gasoline pumps led industry revenue to decline. After the recession, demand for industry products recovered as unemployment dropped and consumer spending on gasoline increased. However, during the five years to 2013, industry revenue declined at an annualized rate of 0.4% to $1.3 billion, says IBISWorld industry analyst Jeffrey Cohen. This decrease includes an expected decline of 2.4% in 2013 alone.
As these trends occurred, industry profit margins also fluctuated, primarily due to highly volatile steel prices. Steel is a primary input into the Gasoline Pump Manufacturing industry. Because the world price of steel fluctuated rapidly during the past five years, operators were less able to anticipate manufacturing costs, harming profit margins, continues Cohen. However, after the recession, increases in consumer spending and downstream demand boosted profitability. Merger and acquisition activity has been prevalent over the period, as well as businesses exiting altogether. Overall, during the five years to 2013, the number of enterprises declined at an annualized rate of 3.2% to 28.
Market share concentration is high. The vast majority of this market share is attributable to two major players, Danaher and Wayne, which supply most of the fuel pumps used by gas stations and vehicle fleets. These players have grown because of their ability to integrate secure digital payment platforms into their pumps, and because they are also developers of gas station point-of-sale (POS) systems; their range of products nearly makes them one-stop shops as suppliers of gas station equipment. Market share concentration has risen over the past five years due to firms exiting the industry and the expansion efforts of Danaher and Wayne. As the economy recovers during the next five years, the industry is anticipated to grow. As the national unemployment rate continues to decline, consumers will drive more often and longer distances, thereby increasing their trips to the gas station. Furthermore, downstream demand from gas stations for industry products is anticipated to increase, thereby facilitating revenue growth. For more information, visit IBISWorld’s Gasoline Pump Manufacturing in the US industry report page.
Follow IBISWorld on Twitter: https://twitter.com/#!/IBISWorld
Friend IBISWorld on Facebook: http://www.facebook.com/pages/IBISWorld/121347533189
IBISWorld industry Report Key Topics
This industry manufactures fuel dispensers and all related equipment. A fuel dispenser system is a machine used at a gas station or other fuel filling station to pump various fuels, including gasoline, diesel, ethanol and biofuels.
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 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.