The Aerial Work Platform Manufacturing industry has exhibited volatile performance over the past five years, with years of expansion as well as years of contraction. Industry demand is primarily driven by construction activity because aerial work platforms are used by nearly all construction industries. “Therefore, demand for the industry's products was volatile as new building and home construction activity remained shaky in the wake of the economic downturn,” IBISWorld Economic Analyst Gavan Blau says in the updated report. Industry revenue declined overall during the period, due to a particularly poor 2011, when construction activity declined. However, industry growth has since been steady, with downstream demand from the construction sector on the rise. Still, revenue has not yet recovered to previous levels. In the five years to 2015, industry revenue is expected to decrease.
Profitability was also volatile during the past five years. Steel prices spiked in 2011, raising input costs and squeezing margins. Exacerbated by simultaneous weak demand for aerial work platforms, profit margins fell. As demand returned, operators were able to pass on input price increases to customers, as well as seek operational efficiency in a less volatile environment. As a result, profit is expected to rebound in 2015.
In the five years to 2020, Aerial Work Platform Manufacturing industry revenue is forecast to grow strongly. “The value of both construction and aggregate private investment are anticipated to significantly increase over the next five years, which will result in strong demand for the industry's products,” Blau says in the updated report. Meanwhile, technological advances in automation will become more prevalent, which will improve profitability by reducing labor requirements. Smaller operators are anticipated to enter the market, aiming to take advantage of growing profit margins.