The industry will benefit from growing commercial and multifamily residential construction
New York, NY (PRWEB) October 12, 2014
The Structural Metal Product Manufacturing industry produces fabricated joists, concrete reinforcing bars and metal plate work, among other products. Industry products are essential for strengthening and evening out concrete foundations and for framing roofs and floors to walls. Therefore, they are heavily used in the construction of commercial buildings and multifamily (apartment) buildings. They are also used in utility and infrastructure projects. Rising construction activity is expected to spur revenue growth for the industry in the next five years.
Nonetheless, the Structural Metal Product Manufacturing industry has faced its share of challenges over the past five years, the first of which is steel price volatility. Over two-thirds of industry products are made of steel, making the price of steel immediately relevant to operators. IBISWorld Economic Analyst Amal Ahmad says “although rising steel prices raise the cost of raw material purchases, they also boost the value of inventory, enabling operators to raise selling prices and boost revenue.” In 2011, strengthening global demand and limited global supply pushed steel prices upward; this, combined with stronger construction activity, boosted operator revenue by double digits. However, oversupply has since subdued steel prices, lowering the value of inventory and slowing down revenue growth. Rising import levels have also constrained revenue growth. An increasing share of domestic demand for structural metal products is being fulfilled by more price-competitive imports from the United States and China. Import penetration has been encouraged by slight appreciation of the Canadian dollar over the period. In response, the industry has been consolidating, with fewer companies generating a greater share of industry revenue. This has helped the industry maintain profit margins over the period, despite rising competition.
Going forward, the industry is expected to continue benefiting from growing commercial and multifamily residential construction. “In addition, the Canadian government's multibillion-dollar plan for infrastructure investment over the next decade will propel demand for metal products for utility construction,” Ahmad says. However, growth will remain constrained by global oversupply of steel, volatile metal prices and rising import competition. Overall, IBISWorld expects revenue to grow over the next five years.
For more information, visit IBISWorld’s Structural Metal Product Manufacturing in Canada industry report page.
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IBISWorld industry Report Key Topics
This industry manufactures a variety of structural metal products for use in building and infrastructure construction markets. Products include fabricated bar joists, concrete reinforcing bars, metal plate work, railway sections and structural panels for bridges, boats and ships.
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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