Although the boom in residential construction will temper, the number of new housing starts is expected to grow robustly.
New York, NY (PRWEB) October 26, 2014
In the five years to 2014, the Water Heater Manufacturing industry has rebounded from recessionary lows. Industry operators produce water heaters of various sizes and types, typically powered by either gas or electricity. Industry products are found in a variety of settings, most commonly homes, office buildings and industrial facilities. “In 2009, demand for industry products bottomed out, falling for a fourth consecutive year in line with the contracting housing market,” according to IBISWorld Industry Analyst Dmitry Diment. However, the subsequent uptick in new residential construction activity has boosted demand for industry products, as new houses require new water heaters. As a result, industry revenue is expected to climb at an annualized rate of 4.0% over the period. IBISWorld expects growth to remain strong in 2014, with revenue projected to rise 3.9% to $2.1 billion over the year.
While the recovery of the housing market has served as the catalyst for demand for new water heaters, the industry has also benefited from disposable income growth, increasing consumers' ability to purchase new water heaters. “Moreover, industry operators benefited from strong growth in export revenue over the period, aided by strong demand from major trade partners and a slight depreciation of the dollar,” says Diment. Nevertheless, rising import penetration from low-cost manufacturers overseas and rising raw material prices have undermined the viability of domestic manufacturers, hampering industry profitability. Industry operators maintained margins by reducing reliance on labor and consolidating with smaller players to realize greater efficiencies, preserving profit margins over the current five-year period.
The industry is expected to continue growing over the five years to 2019, benefiting from the continuation of previous trends. Although the boom in residential construction will temper, the number of new housing starts is expected to grow robustly, creating demand for new water heaters. Industry revenue will also be driven by the development of new energy-efficient water heaters that meet consumer preferences for eco-friendly appliances and new regulation from the Department of Energy. Consequently, industry revenue is forecast to grow over the next five years, despite rising import penetration and expected growth in raw material prices.
For more information, visit IBISWorld’s Water Heater Manufacturing in the US industry report page.
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IBISWorld industry Report Key Topics
This industry manufactures water heaters, which are used in a variety of settings. The majority of industry products are found in homes, office buildings and industrial facilities. They come in various sizes and types and are mostly powered by gas or electricity.
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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