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Industry revenue has declined, though an increase in demand for exports will cause the industry to bounce back. For these reasons, industry research firm IBISWorld has added a report on the Forklift & Conveyor Manufacturing industry to its growing industry report collection.
Los Angeles, CA (PRWEB) February 22, 2013
When discussing the Forklift and Conveyor Manufacturing industry in Canada, one actually discusses US demand for Canadian goods. “Exports to Canada's southern neighbour consistently account for more than 70.0% of all industry exports and more than 80.0% of total industry revenue,” says IBISWorld industry analyst Josh McBee. As such, US trends in the industry's key downstream markets of manufacturing, construction and warehousing largely dictate revenue potential and outcomes.
The tension between this industry's reliance on exports to the United States and its ongoing trade deficit have created a state of decline. According to McBee, “Coupled with historically high steel prices during the past five years, price-based competition from cheaper US products has placed downward pressure on manufacturers' profit margins.” In turn, the number of companies making forklifts and conveyors in Canada has been steadily declining. To avoid exiting the industry, some companies have slashed their unskilled labour forces to increase operational efficiencies while investing in highly skilled engineers to perform research and development (R&D) on higher-margin, value-added products. These activities have resulted in steady declines for employment and wages during the past five years, but the average wage has remained relatively stable because higher salaries for R&D departments offset reductions on the assembly line.
Concentration in the Forklift and Conveyor Manufacturing industry is low, with a large number of mid-sized firms specializing in forklift parts and attachments or specialized conveyor systems. The industry's leading companies are expected to comprise an estimated 10.7% of total industry revenue in 2013. Only Skyjack manages to employ more than 500 people, but more than half of all establishments operate with fewer than 50 employees. As economic downturns in US manufacturing and construction limited demand for this industry's products, companies have been exiting the industry. As such, market share concentration has been increasing during the past five years. Market share concentration will likely continue to increase, as the largest Canadian companies that managed to endure the US recession continue to grow their market shares.
During the five years to 2013, IBISWorld projects industry revenue will decrease at an annualized rate of 3.1%. The decline stems largely from a 27.4% drop in revenue during 2009, in which US demand for Canadian goods slumped in line with the housing crash and ensuing recession. While subsequent gains will likely fail to offset this five-year trough, revenue is expected to increase 2.4% in 2013, bringing the total to an estimated $2.7 billion. The 2013 gain will come on the back of renewed export activity and the domestic manufacturers' increased ability to compete in the global market on the basis of price. Through 2018, revenue is forecast to continue increasing.
For more information, visit IBISWorld’s Forklift and Conveyor Manufacturing in Canada industry report page.
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IBISWorld industry Report Key Topics
This industry manufactures equipment used to lift or move materials or people. Major products include forklifts and industrial trucks; escalators and elevators; conveyor belts, hoists, winches, cranes and monorail systems; and related parts, attachments and equipment.
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.ca or call 1-800-330-3772.
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