Although profit will be pressured, emerging and domestic markets will push up demand
Los Angeles, CA (PRWEB) March 16, 2012
The Elevator Manufacturing industry has been on wild ride over the past five years. The bursting of the US housing bubble in the late 2000s followed by the global recession severely hurt demand for elevators. In 2009 alone, revenue plunged 17.7%. Although manufacturing activity has rebounded substantially since the economic recovery began, construction investment into commercial and residential properties has remained largely subdued. On the positive side, the industry pulled itself out of its recession-induced slump in 2011 as manufacturers focused on supplying elevators to growing export markets. As industrial activity continues to increase over 2012 and US construction markets manage some improvement, industry revenue is expected to jump to $2.4 billion. Over the five years to 2012, revenue is estimated to grow at an annualized rate of 2.2%.
Export demand helped lift the Elevator Manufacturing industry into positive territory in 2011: elevators and parts exports soared. According to IBISWorld industry analyst Brian Bueno, “Foreign developing markets where construction activity has continued to escalate strongly have been accounting for an increasing share of industry revenue.” International construction demand is expected to continue growing strongly over the next five years. As more developing and newly industrialized countries grow and attract foreign investment into major metropolitan areas, construction activity abroad will create demand for elevators. IBISWorld estimates that exports will increase over the next five years. The industry also depends on the health of US industrial markets, which currently supply about one-third of industry revenue. Manufacturing, mining and other markets purchase elevators to move people, goods and materials. “As companies have more cash on hand to invest in capital, such as freight elevators, elevator manufacturers stand to benefit. Investment is expected to grow strongly in the five years to 2017 since corporate profit is at an all-time high,” says Bueno.
The Elevator Manufacturing industry has a moderate level of market share concentration. In 2012, the top four industry participants ate UTC, Schindler, ThyssenKrupp AG and Kone Oyj. Barriers to entry in the industry are moderate, but major players can exploit economies of scale, high research and development spending and long-standing links with buyers to maintain market share. The medium level of concentration also gives firms some ability to pass on raw material price increases to consumers. Over the five years to 2012, industry concentration has increased as larger companies acquired smaller companies, a situation that was exacerbated by the recession. Over the five years to 2017, market share concentration is expected to remain relatively stable. The long-awaited recovery of US construction markets is expected to gain traction in 2013. Further economic improvement will decrease unemployment, increase consumer and business spending, and create robust demand conditions for new office buildings, retail locations, factories, hotels, apartments, and other structures that typically contain elevators. Over the five years to 2017, industry revenue is forecast to grow. For more information, visit IBISWorld’s Elevator Manufacturing in the US industry page.
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IBISWorld industry Report Key Topics
This industry manufactures elevators for humans, freight and other transportation applications.
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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