The industry will continue to grow as construction markets improve
New York, NY (PRWEB) February 13, 2014
The Construction Machinery Manufacturing industry produces equipment for residential, nonresidential, highway and other infrastructure construction. Demand for industry products depends on the level of private construction spending and government funding for infrastructure projects. Furthermore, the industry is highly globalized and is, therefore, susceptible to changes in global economic conditions affecting industry imports and exports.
With this in mind, the industry has faced varied conditions over the past five years. The onset of the recession caused a collapse in property prices and steep declines in US construction activity. International markets also suffered from a decline in confidence, causing export markets to fall significantly in 2009. However, export markets were quick to rebound, assisting rapid industry recovery. As a result, industry revenue is expected to grow at an average annual rate over the five years through 2014. Improvements in domestic conditions, including rising property prices and increasing demand for residential construction, are expected to assist the industry in 2014. The industry is therefore expected to grow in 2014. The industry also experienced an increased level of consolidation during the five-year period. Although new players have entered the industry, establishments are estimated to decline over the five years through 2014. This drop is a result of major players seeking to expand their distribution lines and increase market share.
The Construction Machinery Manufacturing industry displays a medium level of market share concentration, with the four largest players accounting for a significant share of industry revenue in 2013. The industry is expected to continue growing over the next five years, as the value of residential and nonresidential construction improves, creating greater demand for industry products. Furthermore, according to IBISWorld Industry Analyst Jeremy Edwards, “exports are expected to rise over the next five years, albeit at a slower rate than the overall industry.” Competition for industry operators is expected to intensify as the US dollar appreciates and lower-priced international goods cause imports to climb. “Industry profit margins are expected to improve slightly, but will be mitigated by rising construction material prices,” says Edwards. However, overall, industry revenue is forecast to improve over the five years to 2014.