By Will Soutter
The Concrete Reinforcing Bar Manufacturing industry develops fabricated bar joists and concrete reinforcing bars that can be adopted universally across both commercial and residential construction industries.
After a few dismal years at the peak of recession, industry revenue will grow from 4.1% to $12.0 B in 2012, as a result of demand from commercial and residential construction activity. There will be a decline in the industry revenue for the next five years to 2012 at an average annual rate of 7.3%.
With growth in key input prices like steel, the lucrative power of Concrete Reinforcing Bar Manufacturing industry alongside revenue has increased over the past five years. During the period of high demand, customers will receive additional costs from industry firms, whereas when the construction sector witnessed unstable demand, companies were made to reduce their markups. During the five-year period, profitability has been impacted by import penetration. Firms consolidated to lower costs in order to regulate price reductions. Therefore, during that period, the number of industry establishments declined at an average annual rate of 5.8% to 1,637. Market share concentration had a moderate growth representing five years ending in 2012. The expansion of larger companies via mergers and acquisitions and the exit of smaller businesses at the time of recession, have led to growth in concentration. Driven by the acquisitions of larger companies like The Nucor and Commercial Metals Company, the industry concentration has been forecasted to increase over five subsequent years. The entry of smaller operators within the market is expected to benefit larger companies, who may purchase these operators as they expand.
Despite the growth and decline during the past five years, there will be improvement in the industry owing to growth stimulation in construction activity and favorable economic conditions. Demand from infrastructure-related construction will also grow with government funding for highways planned to rise through 2017.