New York, NY (PRWEB) May 05, 2014
This industry manufactures structural metal products for use in nonresidential building, utilities and infrastructure construction. Industry products include concrete reinforcing bars, railway sections, culverts and casings and may be made of steel or nonferrous metals such as aluminum. Consequently, industry revenue depends principally on the level of activity in downstream markets. Following a few dismal years at the height of the recession, industry revenue is expected to grow at an average annual rate of 1.8% in the five years to 2014. This includes 5.8% growth forecast for 2014, largely driven by improving private nonresidential construction, bringing total revenue to $44.8 billion.
According to IBISWorld Industry Analyst Amal Ahmad, “The industry's performance has also been contingent on movement in the prices of metals and on the extent of import penetration.” Metals such as steel and aluminum are key inputs in the manufacturing process; therefore, rising metal prices increase purchase costs. However, most operators are able to pass on cost increases to their industrial customers (for whom structural metal products are indispensable) in the form of higher product prices. Passing costs downstream bolsters the industry's revenue without compromising demand or profitability and establishing a positive albeit counterintuitive relationship between metal prices and revenue. Therefore, rising metal prices over the period have propelled industry revenue. In addition, limited competition from imports in the five years to 2014 has helped operators retain their competitiveness in the domestic market and maintain profitability.
The outlook for the Structural Metal Product Manufacturing industry is promising. IBISWorld expects revenue to grow over the five years to 2019 in line with accelerating commercial and infrastructure construction markets. Still, certain challenges are on the horizon. “Import penetration will intensify due to the ascendance of China, the largest manufacturer of steel in the world and the increasing competitiveness of its low-cost, low-price products in the US market,” says Ahmad. Import penetration will be further encouraged by an appreciating US dollar. In the face of such challenges, operators are expected to consolidate further through mergers, acquisitions and vertical integration in a bid to cut costs and maintain competitiveness.
For more information, visit IBISWorld’s Structural Metal Product Manufacturing in the US industry report page.
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IBISWorld industry Report Key Topics
Operators in the Structural Metal Product Manufacturing industry manufacture structural metal products such as reinforcing bars, bar joists, railway bridge sections, dam gates, transmission tower sections and railroad car racks. They also manufacture metal plate work, such as bins, culverts, hoods, ladles and containment vessels, as well as prefabricated metal buildings. The majority of industry products are used in nonresidential building and utility construction.
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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