Weak consumer spending slowed demand for industry products and services
New York, NY (PRWEB) January 13, 2014
The Machinery Maintenance and Heavy Equipment Repair Services industry is affected when machinery and equipment is idled or left unused. According to IBISWorld Industry Analyst Kerry Coughlin, “A range of industries, from manufacturing and construction to service and energy sectors, outsource maintenance and repair (M&R) work to industry operators.” As weak consumer spending slowed demand for industry products and services during the recession, these sectors reduced their outputs. Consequently, these downstream markets employed machinery and equipment at a lower rate and demanded less M&R work. The industry suffered revenue declines in 2008, followed by steeper reductions in 2009. However, demand for M&R is currently recovering along with the overall economy. Over the five years to 2013, industry revenue fell at an annualized rate of 1.7% to $27.0 billion, which includes 10.6% revenue growth in 2013.
Since industry operators repair used machinery and equipment, success is dependent on both past investment in fixed capital and current activity in downstream industries. As such, a lag exists between spikes in private investment in industrial equipment and machinery, and when the industry actually benefits from this growth. During this period, machines age beyond their warranties (after which owners outsource more M&R work), and after considerable use, are subject to disrepair. Given that the industry's downstream manufacturing and construction sectors are still operating below 2008 levels, a fair amount of machinery and equipment remains underused. Consequently, the upsurge in private investment in industrial equipment and machinery from 2010 to 2013, with double-digit growth each year, has yet to yield major returns for industry companies.
In the five years to 2018, market conditions will be much more favorable for industry operators. “Despite the current period's decline, operators will benefit from private investment in industrial equipment and machinery,” says Coughlin. Machinery requires consistent repairs as the equipment ages. However, such investments will decelerate considerably in the five years to 2018, meaning that broken machines are more likely to be repaired than replaced. In addition, all of the industry's downstream sectors are forecast to accelerate their use of machines and equipment, as the manufacturing, construction, energy and agriculture sectors strive to meet increased demand. As a result, industry revenue is forecast to grow through 2018.
For more information, visit IBISWorld’s Machinery Maintenance and Heavy Equipment Repair Services in the US industry report page.
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IBISWorld industry Report Key Topics
Operators in the Machinery Maintenance and Heavy Equipment Repair Services industry offer a range of maintenance and repair (M&R) services for commercial, industrial, agricultural and other sectors that use heavy machinery and equipment. Services include motor repair, welding, blade sharpening, forklift repair and commercial refrigeration repair. General automotive (IBISWorld report 81111) and electronic repairs (IBISWorld report 81121) are excluded from this industry, but welding automobiles and resales of new and used parts and equipment are included.
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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