Industry performance has been poor due to anaemic construction levels
Melbourne, Australia (PRWEB) March 29, 2013
The Fence and Scaffolding Manufacturing industry's reliance on domestic construction levels has resulted in faltering performance over the past five years. For this reason, industry research firm IBISWorld has added a report on the Fence & Scaffolding Manufacturing industry in Australia to its growing industry report collection.
The onset of the global financial crisis in 2008 resulted in onerous conditions for operators in the Fence and Scaffolding Manufacturing industry in Australia, as consumer and business confidence fell dramatically. Accordingly, “input prices fluctuated as high demand and supply constraints precipitated an increase in the price of iron and steel in 2008-09”, according to IBISWorld industry analyst Jeremy Edwards, before falling again as world demand slumped. Residential construction has been subdued over the past five years, while non-residential construction has remained anaemic as retail conditions have remained poor. In addition, agricultural demand has remained low over the five years through 2012-13, as severe weather conditions and lower consumer spending have affected demand for fence manufacturing. The industry is forecast to experience some short-term improvement following strong declines during the crisis.
The industry has experienced consolidation as large steel manufacturers purchase smaller companies in order to increase their market share. Profit margins have been low over the past five years as a result of poor demand and “firms have subsequently shed staff in order meet new demand levels and avoid posting losses”, says Edwards. Market share concentration in the Fence and Scaffolding Manufacturing industry is at a medium level, with the four top players players accounting for over half of total industry revenue. The industry is dominated by the major steel and mining companies of Australia. BlueScope Steel and Arrium together account for almost half of total industry revenue.
Over the next five years, the Fence and Scaffolding Manufacturing industry is expected to return to growth, albeit low. Private capital expenditure is forecast to rise as consumer and business confidence improve. Investment will be most evident from the private sector, with residential markets improving in the next year to two years while non-residential markets improve towards 2015-16. Major projects such as Sydney's Barangaroo development and growth in Western Australia are expected to assist industry operators. However, public expenditure is expected to remain flat over the next five years as significant spending during the global financial crisis has resulted in the Federal Government looking to return to surplus budgets in the next five years.
For more information, visit IBISWorld’s Fence & Scaffolding Manufacturing report in Australia industry page.
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IBISWorld Industry Report Key Topics
This industry manufactures metal fencing, gates and scaffolding. The industry includes products made from purchased metal and fencing and gates made at plants that draw wire.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Technology & Systems
Regulation & Policy
About IBISWorld Inc.
Recognised 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 Australian 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 Melbourne,
IBISWorld serves a range of business, professional service and government organisations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com.au or call (03) 9655 3886.