Aircraft, Marine & Railroad Transportation Equipment Wholesaling in the US Industry Market Research Report Now Available from IBISWorld

As the economy recovers, Americans will return to spending and traveling, which will renew demand for transportation equipment, especially aircraft. Business confidence and spending will also return, with business travel budgets driving industry demand. The industry's growth, however, will be hampered by the continuing trend of wholesale bypass. Furthermore, the total value of defense contracts – from which the largest operators generate revenue – is expected to decline. For these reasons, industry research firm IBISWorld has updated its report on the Aircraft, Marine & Railroad Transportation Equipment Wholesaling industry.

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IBISWorld Market Research

IBISWorld Market Research

A return to consumer spending and flying will help stimulate demand

Los Angeles, CA (PRWEB) October 08, 2012

In the five years to 2012, IBISWorld estimates that revenue for the Aircraft, Marine and Railroad Transportation Equipment Wholesaling industry has decreased at an average annual rate of 0.5% to $43.1 billion. In 2008 and 2009, industry demand declined as consumers spent less on air travel during the recession. Additionally, a drop in consumer spending caused freight volumes to fall. As a result, the need for new equipment diminished as wear and tear on existing systems slowed. According to IBISWorld industry analyst Radia Amari, tightening credit lines caused a sharp contraction in the availability of financing for purchasing large transportation items provided by this industry. Consequently, industry revenue fell as customers reduced order sizes or delayed wholesale purchases altogether.

The industry turned a corner, however, when revenue began to rebound in 2010. More consumers started taking domestic and international flights as disposable income rose. Furthermore, an increase in consumer spending has caused the amount of freight transported via the nation's waterways and railroads to rise, boosting industry demand and revenue. IBISWorld estimates that industry revenue will increase 3.0% over 2012. “The purchase of transportation equipment represents a significant capital outlay for downstream customers,” says Amari. As such, purchasing decisions are based on long-term trends, with delivery contracts spanning up to 10 years. These long lead times have helped keep industry profit relatively stable over the past five years. In 2012, profit will amount to an estimated 4.1% of revenue, slightly down from 4.4% in 2007. Industry profit has also been sustained as a result of industry consolidation over the past decade, providing companies with economies of scale. In the five years to 2012, the number of firms operating in this industry has decreased at an estimated average annual rate of 1.8% to 2,198.

Over the next five years, growing demand for air transportation will support average annual growth for the Aircraft, Marine and Railroad Transportation Equipment Wholesaling industry revenue through 2017. Increasing wholesaler bypass, however, will hamper industry expansion. Furthermore, the total value of government defense contracts, from which many operators generate revenue, is expected to decline. The Aircraft, Marine and Railroad Transportation Equipment Wholesaling industry is highly fragmented and comprised of many small firms. IBISWorld estimates that about 51.9% of all firms have fewer than five employees and 70.8% employ fewer than 10 people. Despite the fragmentation, the industry has experienced increasing consolidation over the past five years. Over the five years to 2012, the number of firms operating in this industry has declined at an estimated average annual rate of 1.8% to 2,198. For more information, visit IBISWorld’s Aircraft, Marine & Railroad Transportation Equipment Wholesaling in the US industry report page.

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IBISWorld industry Report Key Topics

This industry wholesales transportation equipment and supplies, including aircraft and aircraft parts, boats and marine equipment, railroad cars and railroad equipment and military tanks. It wholesales these products to passenger aviation services providers, freight service providers and military and government agencies. This industry does not wholesale marine pleasure craft, motor vehicle-related transportation equipment or electronic navigational equipment (e.g. sonar or radar).

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About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.


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