As more consumers rented rather than bought homes, demand for industry products increased
Los Angeles, CA (PRWEB) March 15, 2013
The Commercial Washing Machine Manufacturing industry has slightly expanded over the past five years, due to growing demand for apartment tenants. The urban population of the United States has continued its long-term increasing trend, bolstering demand for industry products. “Families living in urban areas typically have less living space, resulting in greater demand for laundromats and other professional cleaning services,” says IBISWorld industry analyst David Yang. This translates into demand for commercial washing machines. Although industry revenue sharply decline during the recession, it has steadily recovered since then. In the five years to 2013, IBISWorld estimates that industry revenue increased at an annualized rate of 0.7% to $261.6 million.
In 2013, revenue is expected to grow 2.1%, as laundromats replace older washing machines. During the recession, downstream customers held on to older washing machines to lower costs, but investments in new machines have picked up as the economic outlook improved. Demand for new commercial washing machines was especially strong over 2011 and 2012, and is expected to carry through 2013. Profit has similarly recovered, though it exhibited considerable volatility due to fluctuations in input prices and import competition. In 2009, industry firms lowered prices in an attempt to attract more customers. Similarly, downstream firms turned to cheaper imported products, causing imports to increase to 20.8% of domestic demand over the year, compared with 15.0% in 2008. As a result, despite low steel prices over 2009, profitability plummeted, putting pressure on industry firms. Since then, profit has steadily recovered on the heels of energy-efficient washing machines, which command higher prices from customers. According to Yang, over the next five years, industry revenue is forecast to slowly increase. Although rental vacancy rates are projected to increase, the slowly growing urban population will result in some demand for cleaning services. Additionally, laundromats and cleaning services providers will continue to replace older washing machines, leading to relatively stable demand for industry products. However, competition from imports is anticipated to expand, which will limit profitability growth in the five years to 2018.
Concentration among the top companies in the Commercial Washing Machine Manufacturing industry is high. The top two companies account for 92.9% of industry revenue in 2013. Compared with 2008, concentration has not changed much, indicating that the two companies have a stronghold on commercial washing machine production. During the recessionary years, concentration rose significantly because the two major players outperformed the industry. As such, concentration rose to 97.6% in 2009. Since then, however, the concentration level has eased slightly, as other operators have also generated stronger revenue in the wake of economic recovery. Still, the industry remains highly concentrated and is unlikely to change over the next five years. The two major players have established operations that allow them to manufacture commercial washing machines (along with other household and commercial appliances) at a relatively low cost. For more information, visit IBISWorld’s Commercial Washing Machine Manufacturing in the US industry report page.
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IBISWorld industry Report Key Topics
This industry manufactures commercial washing machines. Commercial washing machines are most commonly used in laundromats and multifamily homes and are typically coin-operated.
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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