Greater spending on remodeling and housing starts will support revenue growth.
Los Angeles, CA (PRWEB) September 20, 2013
The Cabinet and Vanity Manufacturing industry has been severely set back by prolonged and substantial declines in the home construction and remodeling markets. Homebuilders, architects, designers, retailers and consumers purchase most industry goods during the construction of new houses or as part of a kitchen or bath remodeling project. Unfortunately for the industry, these markets contracted significantly as a result of weak consumer spending and a severe drop in investment into single-family residential construction during and after the recession.
According to IBISWorld Industry Analyst Sean Windle, “industry revenue fell in 2008 before substantially plummeting the following year.” Falling home prices also dampened consumer spending and the construction of new houses slowed. Revenue for the Cabinet and Vanity Manufacturing industry continued to decline in 2010, before finally turning the corner in 2011; however, postrecession growth thus far has not been strong enough to make up for the steep losses suffered during the economic downturn. Consequently, in the five years to 2013, industry revenue is expected to decline.
Responding to weakened demand, industry firms shut down manufacturing plants and slashed jobs. In the five years to 2013, the number of companies operating in the industry declined and employment is expected to fall as well, during the same period, to less than 100,000 workers. Industry profit has also been impacted by weak demand and the price volatility of certain commodities and raw materials; however, profit margins are up slightly from 2008, thanks to stronger demand from residential construction markets the past two years.
In 2013, IBISWorld estimates the four largest industry manufacturers, which include Fortune Brands Home & Security and Masco Corporation, will account for more than 10.0% of revenue (see IBISWorld report 33711 for major player market shares). The remainder of the market is captured by a large number of small and privately owned businesses that serve local retail markets. As consumer spending grows and the housing market stabilizes, revenue is expected to increase. Demographics will play a key role in the demand for housing, as a large segment of the population gearing up to enter the homeowners market will encounter a limited inventory of new houses. Moreover, “as more people buy homes, housing starts will accelerate and demand for industry products will increase,” says Windle.
For more information, visit IBISWorld’s Cabinet & Vanity Manufacturing in the US industry report page.
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IBISWorld industry Report Key Topics
The Cabinet & Vanity Manufacturing industry includes businesses that manufacture kitchen cabinets, bathroom vanities and countertops, primarily made of wood or wood coverings. Manufacturers distribute their products to wholesalers, contract outfitters and home improvement stores in the United States.
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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