Economic turmoil set the industry back, but revenue will reach prerecession levels by 2017.
New York, NY (PRWEB) February 21, 2015
The Fire and Smoke Alarm Manufacturing industry is tightly connected to the downstream construction market, as most safety alarms and detectors are installed during construction of a new residential or commercial building. Consequently, the performance of smoke and fire alarm producers depends on activity in these industries. Over the five years to 2015, the value of residential construction has increased at an average annual rate of 7.4%, while the value of nonresidential construction, which includes retailers, offices, schools and hospitals, has also exhibited growth. “Improving demand from construction has allowed for steady revenue gains in the five years to 2015,” according to IBISWorld Industry Analyst Darryle Ulama. Over this time, industry revenue is expected to rise at an average annual rate of 3.5% to $1.6 billion, including a 2.0% growth in 2015.
In addition to renewed construction activity, the industry has benefitted from the growth of its export segment. Although the trade-weighted index, a measure of the strength of the US dollar, has increased in the past five years, the industry's export value has risen at an annualized 5.1% due to strong demand in emerging markets with prolific construction activity. “However, a strong currency has also allowed for greater imports, as the American purchasing power increases in international markets,” says Ulama. Foreign competitors from Mexico and China have satisfied a greater share of domestic demand in the past five years. By 2015, imports are expected to satisfy 7.6% of domestic demand.
As the domestic construction segment continues to grow over the five years to 2020, demand for industry products will remain consistent. IBISWorld anticipates the value of residential construction will grow at an annualized 6.8% per year and commercial construction to rise an annualized 5.2% in the same time. As a result, revenue for the Fire and Smoke Alarm Manufacturing industry is projected to grow at an annualized rate of 3.5% to $1.9 billion in 2020. However, the US dollar is forecast to appreciate further over the period, stifling the industry's export market growth and encouraging import competition. Nevertheless, strong demand from construction activity in rapidly urbanizing countries will sustain exports in the outlook period.
For more information, visit IBISWorld’s Fire and Smoke Alarm Manufacturing in the US industry report page.
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IBISWorld industry Report Key Topics
This industry manufactures fire alarm equipment used for detection in commercial spaces and households.
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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