An appreciating dollar has made imports less expensive to domestic buyers.
New York, NY (PRWEB) March 30, 2014
Over the past five years, the Metal Tank Manufacturing industry has been slowly recovering from the recession. Industry players design, manufacture and, at times, install metal tanks that store various materials such as grain, dairy, oil, gas, chemicals and water. “During the recession, industrial activity and investment declined, reducing demand for metal tanks that store materials used in the manufacturing processes,” according to IBISWorld Industry Analyst Maksim Soshkin. However, the recession was relatively shallow and downstream markets, including agriculture (the largest industry market), oil extraction and processing, petrochemical and chemical manufacturing, all soon began to recover. In addition, overall industrial activity eventually picked up, albeit at a slow pace. Therefore, in the five years to 2014, industry revenue is expected to climb at an annualized rate of 1.2% to $1.3 billion.
However, industry revenue is still below prerecession levels, with industry players having to compete with strong import competition and deal with abnormal weather events. “An appreciating dollar has made imports less expensive to domestic buyers, putting domestic manufacturers at a price disadvantage,” says Soshkin. Moreover, US manufacturers, which account for the majority on imports, have been able to leverage the economies of scale, expertise and resources that they gain from operating in the far larger US market to outcompete Canadian producers. As a result, imports increased and their share of domestic demand is expected to climb from 19.8% in 2009 to 30.1% in 2014. Nonetheless, because a large portion of industry products have to be fabricated and installed at the same location, imports have not been able to completely displace domestic manufacturing. Industry revenue also declined by 1.5% in 2013 and is expected to further drop 0.8% in 2014 because harsh winter conditions in North America reduced crop production, which reduced the need for industry products that store grains and other agricultural materials.
In the five years to 2019, industry revenue is expected to increase, finally exceeding prerecession levels. Climbing crop, oil, industrial and chemical production will increase demand for industry products. Moreover, a climbing global population will increase the need for better energy and crop storage solutions, such as metal tanks, boosting industry exports. However, strong import competition will continue to slow down revenue growth.
For more information, visit IBISWorld’s Metal Tank Manufacturing in Canada industry report page.
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IBISWorld industry Report Key Topics
This industry manufactures metal tanks, vessels and other containers by cutting, forming and joining heavy gauge metals. Products include acetylene cylinders, cryogenic tanks, farm storage tanks, fermentation tanks, gas storage tanks, liquefied petroleum gas cylinders, oil storage tanks, septic tanks, storage tanks, water tanks and vats.
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