Rising regulation of consumer product manufacturing has boosted demand for testing services
Los Angeles, CA (PRWEB) April 17, 2013
IBISWorld estimates that revenue for the Metal Testing Services industry will increase at an average rate of 2.8% per year to $930.6 million in the five years to 2013, including growth of 7.0% in 2013. In spite of the recession, industry operators have benefited from an increase in research and development (R&D) expenditure and rising regulation over consumer products. In 2008, the federal government passed the Consumer Product Safety Improvement Act, effectively increasing Consumer Product and Safety Commission's budget to impose new testing standards and documentation requirements. According to IBISWorld industry analyst Kevin Culbert, the law, which requires consumer product manufacturers to certify that products comply with safety rules, has boosted demand for third-party testing of consumer products and materials.
While rising regulation of consumer products has provided an overall boost to industry performance, it has also increased competition across the industry. “Faced with more testing costs, companies are increasingly beginning to perform testing of their own in-house, bypassing companies in the Metal Testing Services industry,” says Culbert. “Furthermore, rising demand and high profit have caused more firms to enter the industry.” IBISWorld estimates that the number of companies operating in this industry has risen at an average rate of 1.6% annually during the five years to 2013, growing to 535 in 2013.
The industry landscape is primarily characterized by a high number of small laboratories that serve niche market segments and operate on a regional or local level. According to the latest information from the US Census Bureau, nearly half of industry firms employ between zero and four employees, which gives further indication of the industry's high fragmentation. Over the past five years, industry market share concentration increased as larger firms acquired smaller laboratories to expand their service offerings and customer bases and boost their testing volumes to achieve lower per-unit costs and higher profit margins. IBISWorld expects larger firms to continue acquiring smaller competitors to enter high-growth service areas and grow profit margins over the next five years, leading market share concentration to slowly increase but remain at a low level.
Also during the next five years, the industry will continue to benefit from an increase in corporate profit, which will ultimately boost spending on R&D. The industry will also benefit from improvements to industrial production, which boosts the industry's demand from the mining and manufacturing sectors of the economy. For more information, visit IBISWorld’s Metal Testing Services in the US industry report page.
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IBISWorld industry Report Key Topics
This industry offers outsourced metal testing and related analysis and consulting services for a wide variety of applications in downstream manufacturing, energy, mining and other industries. Metal testing services broadly includes chemical and mechanical testing of metals for identification and characterization, performance and materials development purposes.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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.