Increased regulation will raise costs and lead to a greater amount of industry consolidation
Los Angeles, CA (PRWEB) March 26, 2013
The Waste Collection Services industry has grown modestly in the five years to 2013, with revenue expected to increase 2.9% annually on average to $6.7 billion during the period. This moderate revenue growth has mainly been due to the increased level of public private partnerships, transfer station leasing activities and regulatory standards that require commercial and industrial waste to be handled in a certain manner. Guidelines for handling certain waste products were put in place in the Canadian Environmental Protection Act of 1999 (modified version), since more clients from the commercial sector have increased its level of demand during recent years. “Additionally, following the recession, the federal government has implemented stimulus measures to boost construction activities in 2009,” Deonta Smith, IBISWorld industry analyst, says. The higher level of construction activities has increased demand in 2010, and the sector continues to benefits the industry.
The recession reduced overall waste levels and has also spurred fuel hikes, reducing profit margins and cutting into efficiency among many small and medium-sized operators, forcing some of these players out of the Waste Collection Services industry. In contrast, the larger firms grew during the recession. “Waste collection services have been shown to pass on increases in operating costs to customers, which has changed the competitive dynamic for the industry during the recession as price became a more significant factor in demand,” Smith says. As small and medium-sized companies looked for methods to reduce spending during the recession, they progressively made partnerships with competing firms to utilize their facilities. Market share concentration has increased over the past five years as competitors consolidated to increase profit margins amid the recession. Additionally, the concentration in localized areas is often very low.
As of 2013, there are two major players (Waste Management of Canada and Progressive Waste Solutions Ltd.) that compete with regional and local companies. The industry has undergone cycles of merger and acquisition activities, and further acquisitions are expected due to increasing level of local governments privatizing operations. In 2013, the industry is expected to get a boost from the combination of the improving economic environment and continuing regulatory pressures in the demand market.
Continuing trends of public-private partnerships and rising demand from the commercial sector are forecast to bolster demand during the five years to 2018; during this time, revenue is projected to grow. Meanwhile, the increased level of regulation imposed on service providers is forecast to pressure prices for industry services as facilities and collection vehicles are modified to become more environmentally friendly. This trend will encourage consolidation activities within the industry, as larger companies will be better equipped to operate more efficiently and withstand regulatory pressures. For more information, visit IBISWorld’s Waste Collection Services in Canada industry report page.
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IBISWorld industry Report Key Topics
This industry collects hazardous and nonhazardous waste and recyclable materials. Nonhazardous waste includes municipal solid waste (household waste) and industrial and commercial waste. The industry includes transfer stations, where waste is transferred from local vehicles to long-distance vehicles for transport to disposal facilities. This industry does not account for government-provided services of a similar nature.
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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