The scaling back of mining investment is set to constrain industry growth.
Melbourne, Australia (PRWEB) February 25, 2014
The performance of the Structural Steel Fabricating industry is historically tied to trends in the downstream construction markets. This relationship has become less direct since the onset of the global financial crisis in late 2008 and with the surge in imports from low-cost producers (notably China and Indonesia). IBISWorld industry analyst Anthony Kelly states, “The industry has trended downwards since the late 2000s, influenced by deteriorating investment trends in the commercial and industrial building markets and subdued housing investment.” The industry has also failed to respond to the robust stimulus from the non-building infrastructure markets.
Industry revenue is projected to contract by an annualised 4.2% over the five years through 2013-14 to $7.2 billion, with domestic demand trending down by an annualised 2.1% to $8.4 billion. Steel products are vulnerable to substitution by precast concrete alternatives. Furthermore, import penetration has surged by an annualised 20.0% over the five-year period to total $1.3 billion and account for 15.5% of domestic demand, up threefold from five years earlier. During 2013-14, revenue is projected to increase by 1.4% supported by an upswing in demand for steel products in the construction of apartments, office buildings and bridges. The industry employs an estimated 23,700 people in 1,850 enterprises. According to Kelly, “The industry is expected to make a gradual recovery over the next five years, as improved economic conditions support stronger investment into housing and non-residential building construction.” However, the pace of industry expansion will be contained by the scaling back of investment into resource developments and other infrastructure projects. Overall production costs are set to increase as steel prices are projected to return to an upward trend.
The Structural Steel Fabricating industry exhibits a medium level of market share concentration. Industry concentration increased in August 2007 with Arrium's acquisition of Smorgon Steel. The industry has a fragmented structure with about 84.0% of enterprises employing fewer than 20 people, including one-third of businesses having no employees (typically sole proprietors and partners). Less than 1.0% of enterprises employ more than 200 people. The largest 22.0% of enterprises generate annual revenue exceeding $2.0 million, while the smallest 36.0% of enterprises generate less than $200,000 in annual revenue. The industry’s major players are Arrium Limited and BlueScope Steel Limited. For more information, visit IBISWorld’s Structural Steel Fabricating report in Australia industry page.
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IBISWorld industry Report Key Topics
Firms in this industry manufacture structural steel components for incorporation in buildings or other structures.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Technology & Systems
Regulation & Policy
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