Reduced construction activity and higher import penetration have hampered growth.
New York, NY (PRWEB) February 20, 2014
Building Lighting Control System Manufacturing industry performance has been volatile over the five years to 2014. According to IBISWorld Industry Analyst Brandon Ruiz, “Construction activity slowed during the recession and businesses halted investment in energy-efficient control systems, causing industry revenue to plummet 12.9% and 6.9% in 2009 and 2010, respectively.” Fortunately for industry manufacturers, rising interest in the application of energy efficiency to new building light control systems, in addition to the gradual recovery of the housing market, has renewed interest in industry products. To this end, industry revenue is expected to rise at an annualized rate of 2.3% to $638.6 million over the five years to 2014, boosted by an estimated 5.8% increase in 2014.
Despite robust industry demand, industry operators face potential threats from competition abroad. Enhanced manufacturing capabilities in Asia and Latin America have led to increased lighting control systems production overseas. Since these economies have lower labor and overhead costs, they offer lower prices on comparable products, thereby eroding US industry sales. Due to this rising competition, domestic manufacturers are experiencing significant pricing pressures; in order to maintain demand, domestic players have been forced to reduce their markups, resulting in lower profit. However, heightened merger and acquisition activity has increased industry concentration. Large operators are expected to benefit the most in this new, highly concentrated environment, as they distribute their fixed costs among several facilities, ultimately resulting in higher profit margins.
IBISWorld expects that industry revenue will increase over the five-year period. The industry is expected to continue benefiting from rising interest in the reduction of energy costs. “In addition, wireless technologies are facilitating the installation of lighting control systems in buildings where installing wired systems would be cost prohibitive or unfeasible,” says Ruiz. Consequently, during the five years to 2019, demand for new, energy-efficient systems is expected to increase, supporting greater industry demand.
Concentration in this industry is high. The largest operators are Eaton Corporation, Hubbell Inc. and Acuity Brands Inc. All of the largest players have significant operations in similar industries, such as light fixture manufacturing, which grants them a significant advantage in terms of customer awareness and the ability to bundle products. Efforts by major companies such as General Electric and Ingersoll-Rand, which have considerable marketing muscle in addition to supply chain and inventory management expertise, threaten to transform the industry's composition, either through acquisition or by simply outperforming competitors.
For more information, visit IBISWorld’s Building Lighting Control System Manufacturing in the US industry report page.
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IBISWorld industry Report Key Topics
Companies in the Building Lighting Control System Manufacturing industry manufacture components and develop software for building lighting control systems. These systems include components and software that control communication with switches, motion sensors and light sensors to provide flexible scheduling, daylight harvesting, occupancy control, personal control and load shedding.
Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
Globalization & Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
Major Companies
Operating Conditions
Capital Intensity
Key Statistics
Industry Data
Annual Change
Key Ratios
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