Hot Tub Manufacturing in the US Industry Market Research Report Now Available from IBISWorld
The recovering economy will bolster disposable income and consumer confidence, stimulating a new wave of hot tub purchases. For these reasons, industry research firm IBISWorld has added a report on the Hot Tub Manufacturing industry to its growing industry report collection.
Los Angeles, CA (PRWEB) February 04, 2013
The Hot Tub Manufacturing industry significantly contracted over the past five years. Given that hot tubs and spas are luxury goods, demand highly depends on disposable income and consumer sentiment. The housing market crisis and the subsequent recession resulted in skyrocketing unemployment and stagnant disposable income. In turn, consumer confidence in the economy deteriorated. Although the number of higher-income households, this industry's primary market, moderately increased, it was insufficient in preventing a major fall in revenue. In the five years to 2013, industry revenue is estimated to decline at an average annual rate of 9.3% to $982.6 million. Industry manufacturers slashed hot tub prices after demand sharply fell over 2008. Falling demand coincided with declines in disposable income and consumer confidence. As a result, revenue declined 48.0% in 2009. Since then, steadily improving income has halted industry contraction, although revenue still remains far below prerecession levels. In 2013, revenue is expected to grow 7.1% due to renewed consumer confidence and economic growth.
Over the past five years, profitability has improved from the dismal profit performance in 2008 and 2009. On average, the cost of raw materials, such plastic and resin, has increased, slightly constraining profit recovery over the past three years. Poor profitability and falling revenue caused many small companies to exit this industry. Operators with stronger brand names and production capacity consolidated to expand their product lines and customer base. In the five years to 2013, the number of enterprises is estimated to fall at an annualized rate of 7.6%. The Hot Tub Manufacturing industry is estimated to have a low level of concentration. There are only two industry major players (Jacuzzi Brands Inc. and Masco Brands Inc.) that compete with smaller regional and local manufacturers. Market share concentration has increased over the past five years due to competitors consolidating to increase profit margins amid the recession. Concentration increased in 2009 as demand for industry-related products declined, thus, leading to company exits. Although industry concentration is classified as low, the concentration in localized areas is often higher because smaller local operators typically locate close to their regional competitors.
Over the next five years, the Hot Tub Manufacturing industry is projected to return to growth. The recovering economy will bolster disposable income and consumer confidence, stimulating a new wave of hot tub purchases. According to the Association of Pool and Spa Professionals, higher income households (those earning over $100,000) are the primary market for hot tubs. The number of higher income households is anticipated to increase from 2013 to 2018, helping push up the industry's revenue over the period. For more information, visit IBISWorld's Hot Tub Manufacturing in the US industry report page.
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IBISWorld industry Report Key Topics
This industry comprises companies that manufacture hot tubs and spas. A hot tub is a large tub or small pool, usually made from plastic or fiberglass, full of heated water and used for soaking, relaxation, massages or hydrotherapy. In most cases, they have jets for massage purposes.
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 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.
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