Consumers will continue to prefer cremations, which are more affordable than traditional burial services
New York, NY (PRWEB) December 22, 2014
Over the past five years, the coffin and casket manufacturing industry has deteriorated as a result of increasing funeral costs, which have pushed US consumers to opt for more affordable options, such as cremation. Although the number of annual deaths has increased as a result of an increasing population, demand for industry services has continued to decline over the five-year period. The cost of traditional burials, which include coffins and caskets, has driven the decline in demand for industry products; however, additional factors such as an increasingly secular society and changes in household formation have supported this trend.
US consumers became increasingly price-sensitive at the start of the five-year period as widespread unemployment and falling per capita disposable income discouraged individuals from spending on more expensive services such as traditional burial funerals. Coffin and casket manufacturing revenue rebounded slightly in 2011 as a result of recovering per capita disposable income, though growth was short-lived, and the industry returned to a state of decline in 2012. IBISWorld Economic Analyst Jeremy Edwards says in the new report, “Industry operators have attempted to renew demand for services through the expansion of services offered at funeral homes, which represents the industry's largest market.” However, technological developments and improved convenience for consumers has not been sufficient enough to turn around the industry's fortunes. Revenue is estimated to decline over the five years to 2014.
“Conditions are not expected to improve over the next five years, and consumer preferences will likely continue to trend in favor of cremations rather than traditional burial services,” Edwards says in the new report. Per capita disposable income is expected to rise and strengthen consumer propensity to spend on discretionary items; however, the percentage of cremations per death is projected to rise to almost half by 2019. Consequently, industry revenue is projected to decline over the five-year period. Manufacturers are expected to increasingly target southern states with a lower cremation rate to increase revenue and maintain profitability; however, only large companies are expected to be successful by leveraging economies of scale.
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IBISWorld industry Report Key Topics
This industry primarily manufactures burial caskets, cases and vaults intended to contain dead bodies during and after burial or until cremation. Consumers often purchase these items from funeral homes, but in some cases, they may also purchase them directly from the manufacturers.
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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