Demand for recyclable materials will grow as manufacturing and construction activity rise.
New York, NY (PRWEB) May 30, 2014
Demand for the Recyclable Material Wholesaling industry has impressively grown during the past five years, although it has not been particularly consistent. The recession decimated demand for recyclable materials, as declining consumer confidence led to lower consumption and manufacturing activity. In response, in 2009, the federal government implemented its stimulus initiatives partially dedicated to assisting the industry in its turnaround. “By 2010, industry revenue sharply recovered and renewed construction spending both in Canada and abroad reinvigorated demand for the industry's wholesaling services,” according to IBISWorld Industry Analyst Nick Petrillo. In addition, rising steel prices have bolstered both total industry revenue and profit margins, enabling material wholesalers to achieve annualized revenue growth of 5.8% to $543.5 million during the five years to 2014.
Global industrial operators have recently emerged as one of the strongest markets for recyclable products. “A variety of factors have led to higher demand from this market; primarily, as a result of falling operating costs, wholesalers can offer lower prices for comparable construction inputs frequently used by international manufacturers,” says Petrillo. Thus, recyclable materials have become a very attractive alternative to traditional metal inputs among major industrial buyers. The attractiveness of recyclable materials is only as strong as the value construction operators gain from purchasing cheaper recycled inputs rather than purchasing new materials. With the world price of steel expected to decline by 4.6% in 2014, IBISWorld estimates industry revenue will decline 0.4% in 2014 as additional costs limit industry profit margins.
Over the next five years, continued interest from the government and consumers in construction processes that use recyclable materials will benefit the industry. Strengthening demand for recyclable materials among domestic and foreign construction industries will provide a much-needed hedge against volatile input prices over the five-year period. Likewise, stronger sentiment toward green and sustainable products will further boost demand through increased consumer sentiment toward recycling and through federal, provincial and local recycling standards and ordinances.
For more information, visit IBISWorld’s Recyclable Material Wholesaling in Canada industry report page.
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IBISWorld industry Report Key Topics
This industry wholesales automotive scrap, industrial scrap and other recyclable materials. Industry establishments include auto wreckers that dismantle motor vehicles for wholesale scrap material. Also included are establishments that break up, sort and wholesale all forms of scrap iron and steel using power-processing equipment, such as cranes, hydraulic shears, baling equipment and cable strippers.
Key External Drivers
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Globalization & Trade
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