Wire and Spring Manufacturing in Canada Industry Market Research Report Now Available from IBISWorld
The Wire and Spring Manufacturing industry has been under strain since 2008; however, the downward trend will slow as exports pick up due to a recovery in downstream US markets. For these reasons, industry research firm IBISWorld has added a report on the Wire and Spring Manufacturing industry to its growing industry report collection.
Los Angeles, CA (PRWEB) May 17, 2013
Although springs are known for resistance, the drops in international trade and the recessionary strain on the Wire and Spring Manufacturing industry caused firms to buckle under the pressure. The industry has had to contend with drops in revenue and eroding profit margins. Industry players alike have been forced to respond by closing down factories and slashing employment. The recession has caused nearly all industry downstream market segments to experience declines in demand. Over the five years to 2013, revenue is expected to decline at an average rate of 8.3% per year to $852.9 million, with revenue forecast to fall an additional 0.5% in 2013. “With trade barriers removed by the North American Free Trade Agreement and Canada’s and the United States’ respective currencies at near parity, Canadians have increasingly relied on American products to fulfill their domestic needs,” says IBISWorld industry analyst, Nima Samadi. The United States currently provides 51.1% of Canada’s imports and total imports are expected to account for 63.3% of domestic demand. Export markets also struggled over the past five years, largely due to the severe recession the US experienced. The US accounts for 84.5% of the industry’s exports, so the performance of the US economy and demand from downstream markets in the US play a huge role in determining this industry’s success. Exports currently account for nearly half of industry revenue.
Many of the industry’s wire products are used in some form of construction. The subprime debt crisis in the US dramatically reduced its demand for new construction and consequently wire products. The automotive industry is also a major purchaser of spring and wire products for use in automotive suspensions and seating. In the US, motor vehicle manufacturing revenue fell 36.5% in 2009, which helped decimate demand for the Canadian automotive spring and wire products that are imported by US Automakers. Nevertheless, both the automotive and construction markets have slowly rebounded since 2009, allowing domestic spring and wire manufacturers to slowly rebound from recessionary lows.
From 2013 to 2018, IBISWorld forecasts Wire and Spring Manufacturing industry revenue will fall. Despite downstream demand for industry products increasing as construction begins to increase (in the US) and consumer confidence strengthens, this industry will continue to be decimated by rising import competition, particularly from the United States and China. Some product and service segments have higher concentration levels than others. In 2013, the largest four industry participants will collectively control less than 35.0% of industry revenue. According to Samadi, this low industry concentration is reflective of the large number of firms operating within the industry as well as the low barriers to entry for some product segments. In the five years to December 2013, IBISWorld estimates that enterprise numbers will decrease by 5.7% per year while establishment numbers will decline by 4.6% yearly. This has resulted from the intense price competition and low profit margins under these conditions. With these conditions expected to change very little, industry concentration will increase slightly as larger firms attempt to merge and acquire some of the smaller players. For more information, visit IBISWorld´s Wire and Spring Manufacturing in Canada industry report page.
Follow IBISWorld on Twitter: https://twitter.com/#!/IBISWorld
Friend IBISWorld on Facebook: http://www.facebook.com/pages/IBISWorld/121347533189
IBISWorld industry Report Key Topics
This industry manufactures heavy-gauge and light-gauge springs using steel and drawn wire, as well as manufacturing other wire-based products.
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 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.
For the original version on PRWeb visit: http://www.prweb.com/releases/prweb2013/5/prweb10744006.htm