New York, NY (PRWEB) January 31, 2014
The Hardware 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. Furniture manufacturing (IBISWorld report 33712CA) and construction markets purchase hardware products manufactured by this industry. Consequently, in 2009 downturns in these sectors contributed to industry revenue plunging. While revenue has been on the rise since 2010, it is still expected to only marginally increase at an average annual rate of 0.6% in the five years to 2014. However, as the economy recovers, demand from downstream industries is expected to go to cheap imports from abroad. Industry revenue is expected to increase by 1.8% in 2014 to reach $1.2 billion.
Industry sales have been partially slow to recover due to increasing imports. According to IBISWorld Industry Analyst Omar Khedr, “Import penetration in this industry has caused strong competition from countries with lower wages, which are able to manufacture industry products at lower costs.” As a result, many companies transferred production from Canada to lower-wage countries, such as China and Mexico. Imports are estimated to satisfy 84.4% of domestic demand in 2014, reaching $1.8 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 2.0% to 161 in the five years to 2014. However, due to consolidation, factories closing and companies offshoring to countries with lower wages, overall industry profitability has been recovering since 2010.
Going forward, a recovery in downstream construction markets, both in Canada and the United States, will drive demand for industry products, presenting an opportunity for industry manufacturers. In the five years to 2019, domestic demand for industry products is anticipated to increase, underpinned by growing demand for new houses. “Over the same period, exports are expected to rise as the US economy recovers, bolstering revenue,” says Khedr. This growth, however, will be offset by continued increases in import volumes. This setback will cause industry revenue to decline over the next five years.
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IBISWorld industry Report Key Topics
The Hardware Manufacturing in Canada industry manufactures various forms of metal hardware. Items produced include metal hinges, metal handles, keys and locks, but exclude time locks and coin-operated locks.
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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