New York, NY (PRWEB) July 22, 2014
The Cabinet and Vanity Manufacturing industry has fared poorly in the five years to 2014 because of shattered consumer confidence in the economy and slow residential housing expenditures due to the recession. Additionally, the steadily strengthening Canadian dollar made it cheaper for consumers to purchase imported cabinets and wood furniture products, which lowered domestic demand for manufactured products. Canadian wood furniture manufacturers have faced increasing competition, particularly from countries with low labour costs, such as China and Mexico. As a result, even when residential housing expenditures started to recover from the recession, demand for industry products continued to slow. In the five years to 2014, IBISWorld expects revenue for the Cabinet and Vanity Manufacturing industry to marginally increase at an annualized rate of 0.6% to $2.9 billion, remaining below prerecession levels. Industry profitability has also contracted during the period due to import competition, stagnant domestic demand and rising input costs.
According to IBISWorld Industry Analyst David Yang, “The Canadian dollar is expected to depreciate in 2014, making domestic products comparatively cheaper to purchase than imported cabinets and vanities.” Consequently, industry exports are expected to increase 7.3% in 2014. Consumer confidence is also anticipated to pick up this year, which will bolster consumer spending on home-improvement investments. The residential housing market is also expected to experience strong growth, following fears of a housing bubble in late 2013. As a result, industry revenue is anticipated to increase 5.6% in 2014.
“In the five years to 2019, home renovation and home-improvement spending are anticipated to strongly increase,” says Yang. However, industry growth will be constrained by rising levels of imports, especially as consumers continue to favour more affordable imports. Imports are forecast to increase during the period, making up an increasing share of domestic demand. As a result, exports' share of industry revenue is anticipated to fall in 2019. On the other hand, cost-cutting efforts are anticipated to marginally bolster profit margins in the five years to 2019, though this growth will not be enough to prevent long-term industry decline.
For more information, visit IBISWorld’s Vanity and Cabinet Manufacturing in Canada industry report page.
Follow IBISWorld on Twitter: https://twitter.com/#!/IBISWorld.
Friend IBISWorld on Facebook: http://www.facebook.com/pages/IBISWorld/121347533189.
IBISWorld industry Report Key Topics
The Cabinet and Vanity Manufacturing industry manufactures kitchen cabinets, bathroom vanities and countertops that are primarily made of wood or wood coverings. Manufacturers distribute their products to wholesalers, contract outfitters and home improvement stores.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US and Canadian industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.