LOS ANGELES, CA -- The Cabinet and Vanity Manufacturing industry has been severely set back by a prolonged and substantial downturn in the home improvement and new home construction markets. Homebuilders, architects, designers, retailers and consumers purchase most industry goods during new-home construction projects or remodeling activities, and both of these markets have shrunk as a result of lower consumer spending, and a severe drop in investment in the housing market during the economic recession.

According to IBISWorld industry analyst Andrea Alegria. “industry revenue began contracting in 2007 as falling home prices started to dampen consumer spending and new-house construction slowed. Industry revenue has declined in the four years since then, dropping by as much as 30.3% in 2009 during the trough of the global economic recession. During the five years to 2012 industry revenue is expected to decline at an average annual rate of 9.0% to $12.3 billion. In response to the weakened demand, industry firms have shut down manufacturing plants, slashed jobs and streamlined operations.” In the five years to 2012 industry firms will have declined at an average annual rate of 3.2% to 8,347 enterprises. Industry employment is expected to contract at an annualized rate of 7.1% to 95,593 in 2012. Industry profit has also been impacted by the price volatility of certain commodities and raw materials, and many firms suffered recurring losses during these years.

The high number of foreclosures, limited credit availability, declining home values and poor consumer confidence continue to hinder the pace of recovery in the housing market and to hurt demand for industry products. The industry began to see positive revenue growth in 2011, and is expected to grow a further 8.6% in 2012 as consumer spending grows and the housing markets begin to stabilize. This is good news to the 8,000 businesses that operate in this industry, including major players Fortune Brands.

Alegria forecasts steady growth for the industry in the five years to 2017. Demographics will play a key role in the demand for housing as a large segment of the population is starting to reach first-time homebuyer status and will encounter a limited inventory of new homes. As more people buy homes, demand for products manufactured by this industry will grow. Also, due to deferred maintenance during the downturn, a growing number of properties will be in need of rehabilitation or upgrades, and more people will be inclined to replace existing cabinets.

For more information visit IBISWorld’s Cabinet & Vanity Manufacturingin the US industry 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 includes businesses that manufacture kitchen cabinets, bathroom vanities and countertops, primarily made of wood or wood coverings. Manufacturers distribute their products to wholesalers, contract outfitters and home improvement stores in the United States.

Industry Performance

Executive Summary

Key External Drivers

Current Performance

Industry Outlook

Industry Life Cycle

Products & Markets

Supply Chain

Products & Services

Major Markets

Globalization & Trade

Business Locations

Competitive Landscape

Market Share Concentration

Key Success Factors

Cost Structure Benchmarks

Barriers to Entry

Major Companies

Operating Conditions

Capital Intensity

Key Statistics

Industry Data

Annual Change

Key Ratios

 

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.

Source: IBISWorld

Have something to say? Share your thoughts with us in the comments below.