Train, Subway and Transit Car Manufacturing in Canada Industry Market Research Report Now Available from IBISWorld
New York, NY (PRWEB) June 13, 2014 -- Due to the economic downturn, the Train, Subway and Transit Car Manufacturing industry is expected to experience a bumpy road over the five years to 2014. However, industry revenue is anticipated to increase over the period as trade flows improve, lifting demand for rail transportation higher, particularly for freight transportation. “As railway operators experience heightened demand, existing locomotives will endure more wear and tear,” according to IBISWorld Industry Analyst Brandon Ruiz. Consequently, railway operators will be more likely to replace existing models, bolstering industry revenue at the manufacturing level. Moreover, rising oil prices will also lift demand for rail transportation. As the world price of oil continues to trend higher, businesses that rely on trade will more likely use more affordable means to transport goods, bolstering demand for energy-efficient fleets. To this end, industry revenue is expected to increase at an annualized rate of 2.2% to $1.3 billion over the five-year period.
Although industry revenue is anticipated to increase over the five years to 2014, this is not indicative of a growing industry. Industry revenue is expected to grow over the five-year period due to starting at a low base from the global economic downturn. “Several domestic service cuts enacted in the latter part of the five-year period are anticipated to result in a decline of passenger services,” says Ruiz. As domestic demand for mass transit falls, industry operators are expected to experience a decline in demand for new railcars. Consequently, IBISWorld expects industry revenue to decrease 7.8% in 2014.
Continuing its historical trend, industry revenue is expected to fall over the five years to 2019 as demand for passenger services continues to decline. Moreover, industry operators are anticipated to increasingly offshore domestic operations to countries with relatively low labour costs. As a result, Mexico is expected to be a primary benefactor of this trend, as the country also benefits from the North American Free Trade Agreement (NAFTA). Although industry revenue is forecast to decline, there are potential bright spots for that will likely support revenue from falling further. For example, improving trade flows are anticipated to lift freight rail transportation.
For more information, visit IBISWorld’s Train, Subway and Transit Car Manufacturing in Canada industry report page.
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IBISWorld industry Report Key Topics
This industry primarily manufactures and rebuilds locomotives and railroad cars of any type or gauge, including frames and parts. This industry includes manufacturing rapid transit cars and special-purpose self-propelled railroad equipment, such as rail layers, ballast distributors, rail-tamping equipment and other railway track maintenance equipment.
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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 and Canadian 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.
Gavin Smith, IBISWorld 2, +1 (310) 866-5042, [email protected]
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