Increased regulation will raise costs and lead to a greater amount of industry consolidation
New York, NY (PRWEB) May 31, 2014
In the five years to 2014, heightened volatility in downstream demand initially contrasted with increased demand from municipalities seeking to privatize their waste collection services. Between 2009 and 2011, industry operators witnessed a drop in overall waste volumes as well as fuel hikes that resulted in lower profit margins among small- and medium-sized operators. IBISWorld expects the world price of crude oil to increase at an average annual rate of 10.3% over the five years to 2014, adversely impacting companies that operate diesel-powered waste trucks. Additionally, industry operators obtain a substantial portion of their revenue from the industrial, construction and manufacturing sectors. Since these markets experienced wide fluctuations over the past five years, revenue for the Waste Collection Services industry also fluctuated during this period.
Despite initial hurdles, the Waste Collection Services industry is expected to expand over the five years to 2014, with revenue increasing at an annualized rate of 3.4% to $2.5 billion. According to IBISWorld Industry Analyst Omar Khedr, “This revenue growth is largely due to the increased level of public-private partnerships, transfer station leasing activities and regulatory standards that require commercial and industrial waste to be handled in a certain manner.” Additionally, following a sharp slump in 2009, most downstream markets have rebounded strongly. In the five years to 2014, IBISWorld expects the number of housing starts to increase at an annualized rate of 4.7%, increasing demand for industry services. Although stumbling in 2009, the industrial capacity utilization rate has also improved sharply over the past five years, increasing at an average annual rate of 9.3 percentage points. Together, these factors have led to a strong rebound in industry revenue, including the 2.9% increase expected over 2014.
“Continuing trends of public-private partnerships and rising demand from the construction sector are forecast to push demand higher over the five years to 2019,” says Khedr. Meanwhile, the increased level of regulation imposed on service providers is expected to hurt profitability as facilities and collection vehicles are modified to become more environmentally friendly. This trend will encourage consolidation activities within the industry, as larger companies will be better equipped to operate more efficiently and withstand regulatory pressures.
For more information, visit IBISWorld’s Waste Collection Services in Canada industry report page.
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IBISWorld industry Report Key Topics
The Waste Collection Services industry collects hazardous and nonhazardous waste and recyclable materials. Nonhazardous waste includes municipal solid waste (household waste) and industrial and commercial waste. The industry includes transfer stations, where waste is transferred from local vehicles to long-distance vehicles for transport to disposal facilities. This industry does not account for government-provided services of a similar nature.
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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