The industry will return to growth in the coming years as industrial activity picks up.
Los Angeles, CA (PRWEB) June 16, 2013
The Remediation and Environmental Cleanup Services industry has moderately contracted over the past five years due to stagnation across all downstream markets. The global recession, particularly in the United States, lowered demand for Canadian products. Consequently, domestic manufacturing, mining, oil and gas and construction sectors experienced low demand over this period. “As industrial activity slowed, the incidence of industrial accidents decreased, thereby lowering demand for remediation services provided by this industry,” says IBISWorld industry analyst David Yang. “While government environmental funding grew, it was unable to make up for falling demand from the private sector.” As a result, IBISWorld expects industry revenue to fall at an average annual rate of 1.0% to $1.2 billion over the five years to 2013. In 2013 alone, industry revenue is expected to fall 1.6% due to slow growth in government funding and a contraction in the construction sector.
Profitability for the Remediation and Environmental Cleanup Services industry has also suffered over the past five years because stagnant downstream demand lowered the rates industry firms charged for remediation and cleanup. Remediation providers faced greater internal competition for contracts, causing these operators to bid down rates. “In particular, small firms that lacked specialized equipment fared poorly because they had minimal market power to negotiate favourable contracts,” added Yang. As a result, the number of enterprises fell at an average annual rate of 0.3% from 2008 to 2013. The industry has a low level of market share concentration; about three-quarters of firms are small local operators, none of which contributes more than 1.0% of industry revenue. Additionally, environmental cleanup is regulated on a provincial level, making it costly for firms to operate across provincial borders. However, industry concentration has expanded over the past five years. Major player Clean Harbors significant expanded its Canadian business, causing its share of industry revenue to increase.
Over the five years to 2018, this industry is projected to return to growth as downstream markets recover. Industrial activity is forecast to strengthen as downstream manufacturers, fossil fuel extractors and construction companies expand business operations. The growing US economy will particularly fuel demand for domestic products and for fossil fuel. As industry activity picks up, so will the incidence of disasters like industrial facility accidents and oil spills. Over the next five-year period, the number of industrial facility accidents is anticipated to increase, bolstering demand for remediation services. As a result, IBISWorld anticipates revenue to grow. For more information, visit IBISWorld’s Remediation and Environmental Cleanup Services in Canada industry report page.
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IBISWorld industry Report Key Topics
This industry remediates and cleans up contaminated buildings, mine sites, soil and ground water. Industry firms also undertake soil remediation, wastewater treatment, hazardous material removal and abatement of toxic materials, such as asbestos and lead.
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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