Mining, Oil & Gas Machinery Manufacturing in the US

Source: IBIS World Market Research

 Revenue will rebound, but fluctuating commodity prices will continue to pose a threat

  • Positive commodity pricing trends are expected to support demand from buyers of mining, oil and gas machinery
  • The rising trade-weighted index has made imports less expensive for domestic buyers
  • Industry operators will continue to experience challenging conditions over the next five years

Over the five years to 2016, downstream volatility has rocked the Mining, Oil and Gas Machinery Manufacturing industry. Booming global energy demand promoted strong growth early in the period, but falling oil prices and appreciation of the US dollar have caused heavy declines over the past two years. Over the next five years, the industry is expected to rebound from this downturn, as a recovery in commodity prices will encourage downstream investment in productive capacity. Still, the continued appreciation of the dollar will dampen export volumes and present a challenge to the industry.

 The Mining, Oil and Gas Machinery industry is in the mature stage of its life cycle. Industry value added (IVA), a measure of an industry’s contribution to the US economy, is expected to decline at an annualized rate of 8.8% over the 10 years to 2021. The GDP growth is anticipated to increase an annualized 2.1% during the same period. The negative IVA contribution to GDP is due to dramatic declines in commodity prices over the past two years, which has affected the industry substantially. Industry demand is strongly driven by global demand for energy and resources. The industry’s revenue is tied to movements in commodity prices and the amount of capital expenditure that industry’s customers undertake.

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