Greater spending on remodeling and higher consumer sentiment will support revenue growth
New York, NY (PRWEB) June 23, 2014
The Cabinet and Vanity Manufacturing industry was severely hampered by prolonged and substantial declines in the home construction and remodeling markets. A significant contraction in these sectors caused industry revenue to plummet 30.2% in 2009, and declines continued until 2011. Nevertheless, upward trends in general economic conditions, new and existing home sales and credit availability enabled the industry to finally rebound in 2012, posting strong revenue growth of 10.7%. That year, consumers, feeling more financially secure, increased investments in new homes, renovations and home furnishing purchases. As a result, in the five years to 2014, Cabinet and Vanity Manufacturing industry revenue is anticipated to grow an annualized 4.1% to $14.8 billion, including an 8.0% increase in 2014 alone.
According to IBISWorld Industry Analyst Will McKitterick, “Despite improving economic conditions, the recession greatly impacted the operating practices of cabinet and vanity manufacturers.” For example, companies shut down their manufacturing plants and slashed jobs in response to weakened demand in the wake of the housing crash. While the industry is currently rebounding from recessionary lows, operators remain wary of the recovery and are only slowly beginning to invest in growing their businesses. Enterprise and establishment growth have idled as a result and are estimated to have grown only 0.5% and 0.7%, respectively, over the five years to 2014. Although employers added new jobs in 2012 and 2013, overall employment growth during the period has been extremely low despite improved profit margins, which are expected to recover 3.5% in 2014.
“In the five years to 2019, the industry is forecast to continue growing,” says McKitterick. This increase will largely depend on improvements in consumer confidence, employment, home prices and access to credit, all of which are expected to achieve modest but consistent growth during the period. Additionally, deferred home maintenance during the downturn will encourage homeowners to resume new kitchen cabinetry and bath vanity purchases. Demographics will also serve as a positive driver for industry growth, as a new generation of potential homeowners is poised to enter the housing market and can potentially drive up demand for industry products.
For more information, visit IBISWorld’s Cabinet and Vanity Manufacturing in the US industry report page.
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IBISWorld industry Report Key Topics
Operators in this industry manufacture kitchen cabinets, bathroom vanities and countertops, primarily made of wood or wood coverings. Manufacturers then distribute these products to wholesalers, contract outfitters and home improvement stores throughout the United States.
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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