Los Angeles, CA (PRWEB) December 14, 2012
The Fire and Smoke Alarm Manufacturing industry is tightly connected to the downstream construction market. 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 sectors. According to IBISWorld industry analyst Nikoleta Panteva, over the five years to 2012, the value of residential construction has declined at an average annual rate of 9.2% while the value of nonresidential construction (which includes retailers, offices, schools and hospitals) has declined at 4.7% per year, on average. Meanwhile, industry revenue has declined at an annualized rate of 1.1% to $1.4 billion in 2012, as demand from new construction dropped, industry performance suffered. The commercial construction sector has begun its recovery, however, underpinning revenue growth for operators in the Fire and Smoke Alarm Manufacturing industry.
Trade has been a bright spot for the industry since 2007. With the US dollar depreciating, competing imports have become less of a threat due to their relatively higher prices. As such, industry imports have declined at an average annual rate of 5.1% over the five years to 2012. Meanwhile, US-made alarms and detectors have become more attractive and affordable on the international market, boosting the industry's exports at an average annual rate of 5.5% to $73.8 million. As the domestic construction segment improves over the five years to 2017, demand for industry products will follow suit. IBISWorld anticipates residential construction will grow at an annualized 12.3% per year while commercial construction grows at 6.5% per year. Revenue for the Fire and Smoke Alarm Manufacturing industry is projected to grow at an annualized rate of 3.8% to $1.7 billion by 2017. However, the US dollar is forecast to appreciate over the period, stifling the industry's export market growth and increasing the affordability of competing imports. Export values are expected to grow at a meager 0.3% per year while imports jump at 4.5% per year on average, accounting for 7.0% of the domestic demand for smoke alarms and detectors.
The Fire and Smoke Alarm Manufacturing industry carries a moderate level of market share concentration. The industry's top firm, Tyco International Ltd., will account for about 44.2% of industry revenue in 2012. The remainder of the industry is made up of firms that will consume no more than 5.0% of industry revenue. Because of its size, Tyco generally dictates the pace of the industry. Over the past five years, Tyco evaded substantial losses that other, smaller firms may have endured thanks to its economies of scale and its longstanding supply contracts with downstream customers. To attain a customer base, many of the smaller firms compete on a local or regional basis. “Additionally, many smaller firms attempt to attract new consumers by offering a range of custom solutions tailored specifically to the client's needs,” says Panteva. These can include audio voice control panels and other reporting systems. Over the next five years, IBISWorld expects industry concentration to decrease slightly as the movement toward growth will attract new firms to enter the industry. 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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