As the economy hits its stride, downstream activity, and industry revenue, will grow
New York, NY (PRWEB) October 20, 2014
The Railcar Manufacturing industry has chugged along in the past five years, increasing at an annualized rate. Although the recession forced the industry to a stop, with declines in industrial production and total trade value leading to greatly decreased freight transportation levels, as the economy began to recover, so did industry revenue. Indeed, the industry aggressively rebounded in 2011 and 2012, experiencing revenue increases. The resumption of global trade, stimulus funds that targeted public transportation and companies making their way through a backlog of orders, all pushed the industry to growth. As a result of these factors, industry revenue is set to increase in 2014.
According to IBISWorld Industry Analyst Lucas Isakowitz, “The industry has benefited during the past five years from a variety of legislation, which has increased funding for railway projects.” The American Recovery and Reinvestment Act of 2009 pledged funds toward the High-Speed Intercity Passenger Rail program (HSIPR), a project that aims to establish and maintain high-speed connections between major cities. As of September 2014, 52 HSIPR construction projects were underway in 21 states and the District of Columbia. Additionally, the industry is protected from import penetration by the “Buy America” rules, which require all contracts that use Federal Railroad Administration funds to manufacture industry products in the United States and use US suppliers. The “Buy America” rules specifically require that at least 60.0% of the value of the subcomponents for rail stock and equipment be produced in the United States and that the final assembly happen on US soil.
“The industry is expected to remain on track in the next five years, with increasing industrial production and higher total trade value leading to strong demand for trail transportation,” says Isakowitz. As freight volumes increase, railroad companies will likely demand higher quantities of railcars to both expand and maintain their fleets. Additionally, exports of industry products are expected to continue growing as emerging economies increasingly use railway transport both for freight and passenger services. As a result, industry revenue is expected to increase in the five years to 2019.
For more information, visit IBISWorld’s Railcar Manufacturing in the US industry report page.
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IBISWorld industry Report Key Topics
This industry manufactures railcars for passenger, freight and military use. These railcars include gondolas, tank cars, flatcars, refrigerator cars, covered hoppers and intermodal cars.
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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