New York, NY (PRWEB) January 07, 2015 -- The Wiring Device Manufacturing industry was forced to contend with increased competition from abroad and demand-driven declines from downstream markets over the past five years. The Electrical Equipment Manufacturing industry (IBISWorld report 33531CA) and construction markets purchase wiring devices manufactured by this industry. Consequently, in 2009, downturns in these sectors contributed to industry revenue plunging to low levels. While revenue was on the rise from 2010 until early 2012, concerns over an overheated construction market caused a negative shock in demand for industry products in late 2012 and 2013. However, the economy and downstream industries have begun to pick up stimulating industry demand once again. As a result, industry revenue is expected to increase at an annualized rate in the five years to 2014.
According to IBISWorld Industry Analyst Omar Khedr, “Industry sales have been partially slow to recover during the past five years due to increasing imports.” Import penetration in this industry has caused strong competition from countries with lower wages, which are able to manufacture industry products at lower costs. Due to this, many companies transferred production from Canada to lower-wage countries, such as China and Mexico. Import competition has led to unprofitable plant closures and consolidation, as some domestic operators have been unable to compete with less expensive imports. Overall industry profitability has decreased slightly from 2009 to 2014 due to consolidation, unprofitable factories closing and companies offshoring to countries with lower wages.
“Going forward, a recovery in downstream construction markets will drive demand for industry products, presenting an opportunity for industry manufacturers,” says Khedr. In the five years to 2019, domestic demand for industry products is anticipated to increase at an average annual rate, underpinned by growing demand for new houses and electrical equipment. Over the same period, exports are expected to rise at an annualized rate, as the US economy recovers, bolstering revenue. This growth, however, will be partly offset by continued increases in import volumes. Despite this potential setback, industry revenue is expected to grow over the next five years.
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IBISWorld industry Report Key Topics
This industry manufactures current-carrying wiring devices and noncurrent-carrying wiring devices for wiring electrical circuits. Examples of products include outlet and switch electrical wiring boxes, electrical insulators, transmission pole and line hardware, electrical metallic tubes, switches, conductor connectors, electric sockets, plugs and electric cords.
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Gavin Smith, IBISWorld, +1 (310) 866-5042, [email protected]
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