Melbourne, Australia (PRWEB) January 19, 2013
Over the five years through 2012-13, the Structural Metal Product Manufacturing industry has suffered as a result of the global financial crisis. The fortunes of the industry are inextricably linked to the level of construction activity within the residential, industrial and commercial sectors, all of which experienced robust growth prior to the collapse of the housing market in 2007. According to IBISWorld Industry analyst Angela Kidson, “A combination of the credit crunch and the global financial crisis effectively crippled the industry by late 2008 as demand dropped”. Prices of inputs such as steel also experienced dramatic volatility over this period, as rising prices led to gross oversupply. The industry produces a wide variety of goods for a range of markets. Consequently, the industry is highly fragmented, although concentration is rising following as the industry consolidates after three consecutive years of revenue contraction. In the five years through 2012-13, industry revenue is expected to have declined by 1.5% per annum to a value of $2.37 billion. Marking the second year of recovery, revenue in 2012-13 is forecast to grow by 0.8%.
Improved performance is expected for the industry in the next five years. A strengthening economy and increased activity in the construction division will support this. Over the five years through 2017-18, industry revenue is anticipated to increase. “Growth is expected to be led by the residential construction sector, driven in the near term by large amounts of pent-up demand”, says Kidson. Over the next five years, steel prices are expected to recover gradually as signs of the economic recovery become more pronounced. Nevertheless, high levels of stocks will remain over the next two years, thus limiting any significant upward movement in prices.
The Structural Metal Product Manufacturing industry is characterised by a large number of small players. Market share concentration is low but increasing. An indicator of increasing consolidation is that on average, each firm operates more establishments and higher average revenue (in real terms) than five years ago. The trend of increasing consolidation is expected to continue over the next five years. The industry is in the mature phase of its life cycle, which will be characterised by relatively low turnover growth in terms of volumes, little significant product innovation and few demand avenues. In the absence of organic growth, firms will pursue growth through acquisition in order to gain market share.
For more information, visit IBISWorld’s Structural Metal Product Manufacturing report in Australia industry page.
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IBISWorld industry Report Key Topics
The industry consists of firms that manufacture architectural steel, wrought iron or other metal products that are used as inputs into the construction of buildings and other structures. Products such as doors, window frames and staircases are included in this industry. Items which serve to maintain the structural integrity of the building are not included (these products fall within other industries such as Structural Steel Fabricating).
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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