Pent-up demand and innovative plowing systems will facilitate industry growth.
New York, NY (PRWEB) August 19, 2014
In the five years to 2014, the Snowplow Manufacturing industry's revenue is expected to grow at an average annual rate of 7.6% to $441.0 million. Despite producing equipment that is mainly seasonal, the industry has been helped by steady weather patterns in cold climate areas. High precipitation levels led to high amounts of snowfall throughout the Northeast, East, Midwest and Western United States, increasing the need for snowplows and other snow control products. According to IBISWorld Industry Analyst Antal Neville, “The recession caused industry revenue to stall in 2009 as businesses and consumers were wary of investing in more equipment, but the stall created pent-up consumer demand for new snowplows, which helped industry revenue launch from the 2009 low.” As the economy gradually improved in 2010 and 2011, that pent-up demand was unleashed and revenue grew 9.6% and 18.5%, respectively. IBISWorld expects revenue to grow an additional 1.4% in 2014 due to increased precipitation and continually improving economic conditions.
Despite overall growth, industry operators faced immense pressure from rising commodity prices. Soaring steel prices subdued profitability, forcing manufacturing companies to change their operational strategies to stabilize their variable costs. Many operators cut costs by eliminating some excess labor and shutting down inefficient manufacturing plants. As such, industry employment has remained rather flat in the past five years despite production increases to meet additional demand. This strategy ultimately proved successful, as operators were able to salvage profitability and increase average industry profit margins over the past five years.
In the five years to 2019, the Snowplow Manufacturing industry will likely continue to grow at a steady pace due in part to sustained manufacturing efficiency and a commitment to product innovation. “Profit margins are expected to remain elevated even as steel prices continue to rise because of these lean manufacturing techniques,” says Neville. As far as product innovation, the largest operators have already introduced new technologies, such as Meyer's hands-free plowing system and Northern Star's three-step hitching system. Over the next five years, operators will look to improve durability and reliability and make snowplows that more easily attach to a wider variety of vehicles. All of these trends will help spur growth over the five years to 2019.
For more information, visit IBISWorld’s Snowplow Manufacturing in the US industry report page.
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IBISWorld industry Report Key Topics
The Snowplow Manufacturing industry manufactures snowplows and spreaders, which are devices mounted on vehicles to remove snow and ice from outdoor surfaces. Products vary based on intended purpose and vehicle size. Most companies offer light-duty, heavy-duty and utility vehicle plows. The industry does not include lawn- and garden-type snow-moving equipment.
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