Revenue growth will slow, as defense spending winds down and outsourcing intensifies.
New York, NY (PRWEB) June 30, 2014
The Tactical and Service Clothing Manufacturing industry depended heavily on funding of defense and domestic protective services. Military personnel, firefighters, police officers and emergency medical technicians (EMTs) require apparel made of highly functional and protective fabric (i.e. fire-resistant, waterproof and puncture-protective). Therefore, demand for industry products is closely linked to activity in these downstream industries. “However, over the past five years, there has been a substantial slowdown in federal spending on defense and overall government consumption,” according to IBISWorld Industry Analyst Zeeshan Haider. Consequently, industry revenue has been unable to keep pace with its historical growth trend and is expected to grow at an annualized rate of 0.5% to $262.7 million over the five years to 2014. However, strong demand from resurging markets, such as chemical manufacturing and oil and natural gas extraction, is expected to boost revenue 4.5% in 2014.
Despite rising revenue, profitability for industry operators has declined. In 2010 and 2011, the skyrocketing prices of cotton and synthetic fibers like nylon and neoprene put a damper on margins. “These inputs constitute the largest share of industry expenses, so an increase in their prices can be detrimental,” says Haider. To cut costs and improve profitability, many participants have sent manufacturing activities to operators in low labor-cost countries (a process known as outsourcing). This trend has limited the need for domestic employment, which has barely increased over the past five years.
This industry is expected to make a strong recovery over the five years to 2019. Increased government consumption, which declined over the previous five-year period, is expected to drive revenue growth over the next five years. Additionally, reshoring of chemical, fertilizer and pesticide manufacturing jobs to the United States is expected to create another avenue for this industry to grow. These two markets require high-quality service apparel, which will boost demand for industry items.
For more information, visit IBISWorld’s Tactical and Service Clothing Manufacturing in the US industry report page.
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IBISWorld industry Report Key Topics
This industry primarily manufactures tactical apparel for the personal, military and service (e.g. police and fire service) markets. Tactical apparel describes clothing with specialized functions such as fire protection, puncture resistance, high visibility and water repellence. The industry does not include manufacturers of safety equipment such as body armor and bulletproof vests.
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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