New York, NY (PRWEB) January 26, 2014 -- The Rubber Product Manufacturing industry offers a range of goods, including nontire rubber automotive parts, construction materials and office supplies. Industry growth was depressed during the global economic recession, with revenue declining 14.7% in 2009. Weakened demand for rubber product inputs from the automotive and construction industries, which together account for nearly half of industry revenue, was largely the cause of the drop. However, revenue bounced back strongly as demand from key downstream buyers picked up. A revitalized US auto industry and improving domestic construction sector in recent years have bolstered trade demand for industry rubber products. As a result, industry revenue has been increasing at an average annual rate of 3.1% to $2.2 billion in the five years to 2014.
The industry is expected to grow in 2014, albeit at a slower pace, with an expected revenue gain of 2.3% during the year. “While the industry is expected to grow over the next five years, rising raw material costs and increased competition from imports will limit revenue growth,” according to IBISWorld Industry Analyst James Crompton. In the five years to 2019, revenue is expected to increase at an average annual rate of 1.8% to an estimated $2.4 billion, propped up by a continued uptick in demand from automobile manufacturers and other downstream buyers.
“While modest growth in revenue paints a rosy picture of the industry coming out of the recession, companies face significant long-term challenges in terms of foreign competitors, which benefit from lower operating expenses,” says Crompton. Consequently, the number of domestic rubber product manufacturers has declined during the past five years and is expected to fall through 2019. Fortunately for the industry, demand from the United States, which accounts for more than 90.0% of industry exports, is expected to continue as recovery advances.
Over the next five years, trade is expected to grow, with imports outpacing the anticipated growth of exports. IBISWorld projects that imports will account for 53.3% of domestic demand in 2019, compared with 54.8% in 2013. The increased competition from imports has created a need for innovation in the industry so it can compete with low-cost competitors abroad. Industry exports, which primarily go to the United States, are expected to account for 47.7% of industry revenue in 2019.
For more information, visit IBISWorld’s Rubber Product Manufacturing in Canada industry report page.
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IBISWorld industry Report Key Topics
This industry manufactures a range of rubber products from doormats to rubber bands. Due to the diversity of goods, this industry sells to a number of downstream industries including manufacturing, construction and healthcare companies. The industry does not, however, include the following products: rubberized fabric, rubber clothing, rubber tires and tubes, rubber hoses and belts, rubber gloves, rubber toys, rubber gaskets and packing and sealing devices.
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Gavin Smith, IBISWorld, +1 (310) 866-5042, [email protected]
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