Railcar Manufacturing in the US Industry Market Research Report Now Available from IBISWorld

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In 2013, industry revenue is expected to finally catch up to its 2008 level, though only briefly; offshoring will drain revenue in the coming years. For these reasons, industry research firm IBISWorld has added a report on the Railcar Manufacturing industry to its growing industry report collection.

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Domestic manufacturing activity will decline as companies offshore production

In the midst of the global recession, the Railcar Manufacturing industry veered off course but finally found its way into the station during the five years to 2013. “The moderate annualized increase in industry revenue of 0.7% masks the sharp demand declines experienced during the recession,” says IBISWorld industry analyst Nima Samadi. Before the recession, the expanding economy led to a large backlog of railcar orders as rail transport companies ordered more industry products in response to growing demand for commodities. However, the decline in orders, beginning in 2008, was too much for the industry to shoulder, and industry revenue declined 24.0% in 2009 and 7.3% in 2010. The industry aggressively rebounded in 2011 and 2012, largely due to the resumption of global trade, companies making their way through their backlog of orders and the industry benefiting from stimulus funds that targeted public transportation. Industry growth is forecast to continue in 2013, with revenue rising 9.8% to $4.9 billion during the year.

The recession hit railroad operators particularly hard. According to Samadi, “Capital-intensive businesses pulled back on investments, which hurt industrial production.” Additionally, trade slowed to minimal levels. Railroad operators derive most of their revenue from shipping industrial products, including coal, machinery and other industrial mainstays. With dropping demand for shipping industrial products, railroad operators left unused railcars for storage and stopped ordering new railcars. However, the industry rebounded strongly in 2011 and 2012 due to the industry's backlog of orders, particularly among exported products. Exports are expected to grow at an annualized rate of 3.6% per year during the five years to 2013, including increases of 19.8% and 18.0% in 2011 and 2012, respectively.

The Railcar Manufacturing industry has a moderate level of concentration, with the top four operators accounting for close to two-thirds of industry revenue in 2013. Concentration has increased slightly over the past five years due to the recession, which slowed manufacturing activity across the United States, and decreased the need for transportation services. As such, the demand for new and refurbished railcars fell, forcing many smaller and regional operators to exit the industry. This provided a boost to the market share of some of the industry's major companies; however, growth in concentration was limited, as even the industry's biggest companies were forced to scale back operations amid the economic downturn.

The next five years are expected to be challenging for the industry. Despite expected gains in industrial production and a shift toward sustainable infrastructure like railroads, major players are increasingly looking overseas for growth opportunities, to the detriment of their domestic manufacturing activities. Emerging economies that were left relatively unscathed from the global recession are growing at much faster rates than developed Western economies. The offshoring of manufacturing to cater to these emerging economies will limit US industry growth prospects, leading revenue to fall in the five years to 2018.

For more information, visit IBISWorld’s Railcar Manufacturing in the US industry report page.

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IBISWorld industry Report Key Topics

This industry manufactures railcars for passenger, freight and military use. These railcars include gondolas, tank cars, flatcars, refrigerator cars, covered hoppers and intermodal cars.

Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
Globalization & Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
Major Companies
Operating Conditions
Capital Intensity
Key Statistics
Industry Data
Annual Change
Key Ratios

About IBISWorld Inc.
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.

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Gavin Smith
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