For the past five years, the Industrial Machinery Manufacturing industry has been in decline
Melbourne, Australia (PRWEB) January 07, 2013
Almost three-quarters of products made by the Industrial Machinery Manufacturing industry are used by other manufacturers. This includes machinery that ranges from knitting machines to taxi meters and affects a wide range of manufacturing processes. For the past five years, the industry has been in decline; industry revenue is expected to shrink by 2.3% per annum over the five years through 2012-13. According to IBISWorld Industry analyst Angela Kidson, ‘the gradual removal of tariffs and the emergence of low-cost manufacturing hubs in developing economies have caused the manufacture of textiles, automobiles and other products to head offshore’. This has constrained demand for domestically produced industry products such as industrial ovens and furnaces, fans and bearings. Despite the challenging conditions, some firms have managed to prosper by focusing on niche markets. For example, manufacturers of water treatment equipment have enjoyed strong growth, buoyed by drought conditions and government investment into water infrastructure.
Price competition is becoming the crux of the industry's decline as the penetration of cheap imports has been increasing in the past five years. Despite this, there is a silver lining for the industry in the form of new and niche markets. Firms that are able to concentrate on high-value niche products with efficient operations will perform well. ‘Water treatment equipment is one such product segment and is expected to grow its share of industry revenue over the next five years’, adds Kidson. However, overall the industry's performance is forecast to deteriorate even further over the next five years. This will be due to increasing challenges faced by the Manufacturing division, which have already been exacerbated by the global financial crisis. Industry revenue is expected to contract over the next five years.
Market share concentration for the Industrial Machinery Manufacturing industry is low. This industry incorporates a large number of unrelated products. Very few industry participants manufacture more than one product assigned to this industry. However, industry concentration varies between market segments. In addition, there are a number of products classified to this industry that are no longer manufactured in Australia or where there is limited local production (i.e. domestic demand is mostly satisfied by imports). The industry is highly fragmented and characterised by a large number of players operating in different segments. Products in each segment tend to be highly homogenised and thus operators tend to compete based on price rather than product quality. The industry’s largest player is ABB Australia.
For more information, visit IBISWorld’s Industrial Machinery Manufacturing report in Australia industry page.
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IBISWorld industry Report Key Topics
The Industrial Machinery Manufacturing industry consists of establishments that manufacture industrial machinery, including ball or roller bearings. It also includes companies engaged in manufacturing marine inboard engines (except inboard diesel engines of 37 kilowatts brake power and over) and marine outboard motors.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Technology & Systems
Regulation & Policy
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