Subsiding fears about a housing bubble will help propel demand from residential and commercial builders
New York, NY (PRWEB) December 04, 2014
The Precast Concrete Manufacturing industry designs and manufactures products such as tiles, slabs, panels, culverts, manholes, beams and trusses. Industry products are either precast using a standard mold or prestressed under the pressure of steel rods, and are used in construction projects. Infrastructure construction generates the majority of demand for precast and prestressed concrete, followed by residential and commercial building construction. Weak construction activity in the aftermath of the recession has curbed demand for industry products, limiting revenue growth to an in the five years to 2014.
According to IBISWorld Industry Analyst Amal Ahmad, “construction markets often turn to operators who can deliver concrete products rapidly and on tight project deadlines.” In addition, markets often require the product to be customized in strength, durability and shape. As a result, successful operators are located in proximity to key construction markets, keeping the industry relatively fragmented.
The bulky and heavy nature of precast concrete also limits extensive international trade in the industry. Export levels are low while import levels are low to moderate. Nonetheless, imports have accelerated rapidly in the five years to 2014, coming primarily from the nearby United States, which incurs low transportation costs, and from China, a low-cost manufacturer of generic products. “Imports are unlikely to displace industry operators in the domestic market, given the importance of local providers to construction markets,” says Ahmad. However, imports do intensify competitive pressure on operators, especially on the basis of price, which squeezes profit margins. IBISWorld expects a decline in profitability from five years prior. Profit has fallen due to weak market demand, rising input costs and greater import competition.
Going forward, IBISWorld expects the industry to benefit from improving construction markets. In particular, subsiding fears about a housing bubble will help propel demand from residential and commercial builders. Infrastructure spending is harder to forecast, pending developments in public spending. Overall, revenue is expected to rise.
For more information, visit IBISWorld’s Precast Concrete Manufacturing in Canada industry report page.
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IBISWorld industry Report Key Topics
The Precast Concrete Manufacturing industry manufactures precast and prestressed concrete products for use in various construction markets. Industry products include precast concrete slabs and panels, building boards, roofing tiles, railroad ties, posts and poles as well as prestressed bridge beams and trusses. The production of concrete blocks, bricks and pipes are excluded from this industry.
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