Growth in building activity and revitalized economic activity will stimulate demand
New York, NY (PRWEB) January 17, 2014
The Wiring Device Manufacturing industry was forced to contend with increased competition from abroad and recession-driven declines in demand from downstream markets over the past five years. Electrical Equipment manufacturing (IBISWorld reports 33531CA) and construction markets purchase wiring devices manufactured by this industry. Consequently, in 2009 and 2010, downturns in these sectors contributed to industry revenue plunging. While revenue has been on the rise since 2010, it is still expected to decline at an average annual rate of 0.2% in the five years to 2013. As the economy recovers though, demand from downstream industries is expected to continue stimulating industry demand. Revenue is expected to jump 5.5% in 2013 to reach $1.1 billion as demand from electrical equipment manufacturing and construction rates continue to increase.
According to IBISWorld Industry Analyst Omar Khedr, “Industry sales have been partially slow to recover due to increasing imports.” Import penetration in this industry has caused strong competition from countries with lower wages, which are able to manufacture industry products at lower costs. Due to this, many companies transferred production from Canada to lower-wage countries, such as China and Mexico. Imports are estimated to satisfy 64.6% of domestic demand in 2013, reaching $1.5 billion. Import competition has led to plant closures and consolidation, as some domestic operators have been unable to compete with less expensive imports. Consequently, the number of establishments is expected to decline at an average annual rate of 0.9% to 91 in the five years to 2013. However, due to consolidation, factories closing and companies offshoring to countries with lower wages, overall industry profitability has decreased slightly from 2008 to 2013.
Going forward, a recovery in downstream construction markets will drive demand for industry products, presenting an opportunity for industry manufacturers. “In the five years to 2018, domestic demand for industry products is anticipated to increase, underpinned by growing demand for new houses and electrical equipment,” says Khedr. Over the same period, exports are expected to rise as the US economy recovers, bolstering revenue. This growth, however, will be partly offset by continued increases in import volumes. Despite this potential setback, industry revenue is expected to grow.
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IBISWorld industry Report Key Topics
The Wiring Device Manufacturing in Canada industry manufactures current-carrying wiring devices and noncurrent-carrying wiring devices for wiring electrical circuits. Examples of products include outlet and switch electrical wiring boxes, electrical insulators, transmission pole and line hardware, electrical metallic tubes, switches, conductor connectors, electric sockets, plugs and electric cords.
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Globalization & Trade
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