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2013 State of the Industry

August 1st, 2013 / By: / Industry News

Cause for optimism

In 2012, the overall business and sales environment improved for many industry participants. Many manufacturers, even in the traditional markets, did slightly better than in 2011. Residential construction increased 15%—with nonresidential construction increasing 6%—in 2012 compared with 2011. These increases in construction enhanced sales growth prospects for awnings, fabric structures, and geosynthetics.

Construction

Geosynthetic products, manufactured by about 50 companies for the U.S. marketplace, include geotextiles, geomembranes, and geogrids, which are used in erosion control, road construction, and other infrastructure projects. In terms of value, geomembranes made up about 34% of demand in 2012, owing to their usage in sealing waste containment areas and leachate pits in the $55 billion U.S. solid waste industry. Geotextiles, the second largest segment in value, represented about 25% of demand in the U.S.

The use of geosynthetic materials in construction has traditionally grown in the U.S. at about 5-6% annually; growth was up about 1.5% in 2012, but is expected to rebound to 2-3% in 2013. The prospects for positive growth in the U.S. geosynthetics market were buoyed in late June 2012 when Congress passed a bill that will spend more than $100 billion on federal highway and transit programs during the next two years.

Industry outlook

The Achilles’ heel for the industry is that not enough industry manufacturers, distributors, and fabricators are doing enough to grow their business and subsequently grow the industry. Many industry participants are not extending themselves by investing in a meaningful way in marketing and product innovation. They’re not pushing the envelope enough now that the dust has settled from the industry turmoil that sapped sales and growth in the specialty fabrics industry in late 2008 and 2009. Although the situation has improved since 2009, too many manufacturers are still employing marketing practices they’ve used in the past.

Good examples of improved marketing in the industry were evident in the trade show booths on display at the IFAI Specialty Fabrics Expo in Boston, Mass., in November 2012, and at Geosynthetics 2013 in Long Beach, Calif., in April 2013. Never before were so many booths exhibiting open, customer-oriented design layouts, with more messaging in the booths targeted to customers attending these shows.

Nonetheless, more manufacturers need to get on board with serious investment in product innovation and marketing their products and businesses to their customers.

Great expectations

Successful players in the industry have seen opportunities in the marketplace and have taken advantage of them. They believe that investing in product and service innovation is critical to the success of their business in any economy, but especially in one that is slow-growing. This is no time to let your guard down. U.S. specialty fabrics industry participants may need to pursue opportunities in the global marketplace to reap the benefits from the gradually improving business climate in 2013 and beyond.

Jeff Rasmussen is the market research manager for the Industrial Fabrics Association International (IFAI) in Roseville, Minn.

Editor’s note

The “State of the Industry” report is produced annually by the Industrial Fabrics Association International. In this update, targeted specifically for Geosynthetics readers, we are printing excerpts from the 2013 report researched and written by Jeff Rasmussen of IFAI.

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