Los Angeles, CA (PRWEB) February 03, 2013
The Hardware Manufacturing industry is in decline as it faces various problems that primarily stem from international competition. Despite achieving some gains in 2011, revenue has been on a downward trend for more than a decade. The trend will reverse in 2013 as revenue grows 1.1% to $7.2 billion due to strong demand from building, developing and general contracting, yet the industry marks an annualized decline of 5.7% since 2008. “Already facing difficulties, hardware manufacturers suffered major blows between 2008 and 2009 as its major customers in construction, automobile and furniture manufacturing severely cut demand for new hardware,” says IBISWorld industry analyst Agiimaa Kruchkin. A rebound occurred in 2010 and 2011, but growth is expected to dissipate as customers continue to source their orders from abroad.
The rapidly increasing tide of low-cost imports has continued to erode industry revenue and reinforce a focus on price-based competition. “The sheer level of price-based competition has prevented domestic manufacturers from implementing price increases despite rising production costs,” says Kruchkin. As a result, domestic firms are exiting the industry and imports are continuously occupying a greater share of domestic demand. Concentration in the Hardware Manufacturing industry has been trending upward as many firms have exited the market altogether or are acquired by larger players; the number of enterprises has fallen almost consistently for more than a decade. With the increasing intensity of price competition and falling profit margins, IBISWorld forecasts that industry concentration will continue to increase over the next five years. Larger firms will continue to acquire some of the smaller players to increase market share and become more competitive. Current major companies include Stanley Black & Decker Inc., Assa Abloy AB and Ingersoll-Rand Company Ltd.
These tough conditions have resulted in falling industry profit, which has inevitably led to consolidation. The total number of firms is dropping as the industry reels in its present excess capacity. Furthermore, many firms are moving operations to countries where operating costs are lower, thus allowing them to achieve better profit margins. Like revenue, the total number of industry firms has been on a downward trend for more than 10 years. In addition, as firms have attempted to cut costs, employment has fallen rapidly. The industry will continue to underperform the US economy during the next five years. Increased import penetration across most product segments will weigh heavily upon revenue growth. For more information, visit IBISWorld’s Hardware Manufacturing in the US industry report page.
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IBISWorld industry Report Key Topics
This industry manufactures various forms of metal hardware. Items produced include metal hinges, metal handles, keys and locks, excluding time locks and coin-operated locks.
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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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.