Lower defense funding and fewer fears about gun regulations will temper industry growth
New York, NY (PRWEB) July 10, 2014
Over the past five years, the Telescopic Gunsight Manufacturing industry locked in strong growth as demand for industry products increased. Industry operators design and produce telescopic sights and related components for firearms. Following the election of President Obama and recent mass shootings in the United States, such as the Aurora, CO and Sandy Hook Elementary School shootings, consumer fears over more stringent nationwide gun regulations rose. Consequently, consumers purchased firearms in record numbers, creating a surge in demand for complementary goods such as telescopic gunsights. Prior to the five-year period, the industry benefited from an increase in demand for military-grade scopes as the United States fought in the Iraq and Afghanistan wars. Therefore, in the five years to 2014, industry revenue is expected to increase an annualized rate.
In recent years, however, declining military spending has tempered industry growth. In 2011, the United States withdrew from Iraq and wound down combat operations in Afghanistan. The de-escalation of combat operations, coupled with attempts at reducing government spending, lowered government spending on industry products, causing demand for military-grade scopes to fall. Moreover, as the chances of more stringent gun regulations being implemented by 2014 grew increasingly minimal, consumers reduced gun and related equipment (i.e. scopes) purchases. As a result, industry revenue is expected to fall in 2014. The average industry profit margin also declined over the past five years due to increasing domestic and foreign competition, as well as greater public sector emphasis on price.
The Telescopic Gunsight Manufacturing industry has a moderate level of market share concentration. Over the five years to 2019, industry revenue growth is forecast to decline, climbing at an annualized rate. Less federal defense funding will continue reducing military demand for industry products. However, as local and state government budgets are reformulated, funding for law enforcement equipment, such as scopes, is anticipated to recover. Moreover, as it becomes more apparent that stringent national gun regulations are unlikely to pass, firearm sales are anticipated to normalize. Gun sales volumes will decline, tempering demand for accessories such as gun scopes. Nonetheless, after years of skyrocketing gun sales, the volume of firearms held by consumer is expected to remain large. As a result, there will still be significant demand for gun add-ons, such as scopes.
For more information, visit IBISWorld’s Telescopic Gunsight Manufacturing in the US industry report page.
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IBISWorld industry Report Key Topics
The Telescopic Gunsight Manufacturing industry manufactures telescopic sights (i.e. scopes) for mounting onto firearms.
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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