Growing disposable income levels will continue to aid industry recovery.
New York, NY (PRWEB) March 16, 2015
Trends in consumer preferences and discretionary incomes directly influence the financial performance of the Personal Watercraft Manufacturing industry. The $612.6-million industry is strongest when customers have high disposable incomes and confidence in the economy. Consequently, the industry struggled during the recession, as demand for all of its products plummeted and recovery lagged behind many other purchases. “Cash-poor consumers deferred leisure and recreational spending, stifling sales of all industry products,” according to IBISWorld Industry Analyst David Witter. As consumer confidence has returned over the five-year period, so has revenue growth for this industry. In the five years to 2015, IBISWorld expects revenue for the industry to increase at an average annual rate of 4.7%, bolstered by a 6.7% spike in 2015.
Domestic operators must compete with significant import penetration. “While some companies, such as Kawasaki and Yamaha, have manufacturing facilities in the United States, other major brands like Bombardier do not produce personal watercraft domestically,” says Witter. Imports are expected to grow an average of 4.3% annually over the five years to 2015, buoyed by an appreciating dollar, which makes foreign goods relatively less expensive for US consumers. Conversely, exports do not play a significant role in the industry, accounting for about 10.0% of revenue.
Oil price spikes also play a major role in demand for industry goods. When the price of oil rises, the operating cost of personal watercraft also increases, which constricts demand for new watercraft. Rising oil prices have driven the bulk of innovation in the industry though, as operators have released increasingly fuel-efficient personal watercraft to minimize the effect of fuel costs. However, industry players should benefit as oil prices have dropped significantly from their high in 2012. Industry revenue is expected to remain relatively flat in the five years to 2020. While disposable income levels are expected to rise, consumer leisure time will fall as employment rates increase, reducing the amount of time available for personal watercraft use.
For more information, visit IBISWorld’s Personal Watercraft Manufacturing in the US industry report page.
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IBISWorld industry Report Key Topics
This industry manufactures personal recreational watercraft that riders can ride or stand on.
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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