Automatic Fire Sprinkler System Manufacturing
Business for Sale Industry Economics
2005 - 2020
2020 - 2026
Fire prevention devices for residential and non-residential buildings are manufactured by the Automatic Fire Sprinkler System Manufacturing sector. Automatic sprinklers are a system of pipes connecting to a building’s water source that sense heat and release water automatically to extinguish or regulate flames.
Since sprinklers are most commonly installed in new buildings, industry demand reflects the level of new construction activity in the United States. Sprinkler machine revenues have been slowed by the sluggish growth of domestic construction markets in the five years leading up to 2020.
Overall, research forecasts a 0.1 percent annualized decline in market sales to $387.3 million in the five years leading up to 2020, with a 0.1 percent increase in 2020 alone.
Automatic fire sprinkler systems, which are fire control mechanisms that emit water automatically if smoke is detected or a certain heat level is crossed, are manufactured by companies in the Automatic Fire Sprinkler System Manufacturing sector.
While most of the industry’s leading companies are vertically integrated firms who offer these facilities to building builders, this industry does not provide operation income from the design, construction, and repair of sprinkler systems.
Slow growth in domestic construction operation in the five years leading up to 2020 reduced demand for sprinkler systems in conventional commercial building markets.
Meanwhile, stricter construction codes and fire-safety standards have increased demand from residential building developers, who had previously accounted for just a limited portion of the industry’s profits.
For the five years to 2020, market income is forecast to slip marginally by an annualized 0.1 percent to $387.3 million, with a 0.1 percent increase in 2020 alone.
With expanding domestic construction operation and progressively stricter fire protection and building code legislation, the Automatic Fire Sprinkler System Manufacturing industry is projected to return to development over the five years to 2025.
New fire codes have traditionally been the primary driver of demand for automatic fire sprinkler systems, and this trend is expected to continue in the coming years.
Retrofitting would provide a stable supply of demand for industry goods from the nonresidential sector, in addition to steady demand from new construction operations.
Increased demand for electronic, electrical, and data storage capacity, in particular, is likely to fuel demand for more complex sprinkler systems.
Over the next five years, research forecasts sales to increase by 1.7 percent annually to $420.8 million.
Automatic sprinkler fire-fighting devices are manufactured in this sector.
A network of pipes connecting to a building’s water source is characteristic of these networks.
Devices that sense fire and immediately unleash water to extinguish the flames are among the industry’s items.
The income earned by the actual installation and repair of sprinkler systems in buildings is not included in the sector.
The capital intensity of the Automatic Fire Sprinkler System Manufacturing industry is low to moderate. According to research, operators will spend $0.09 on capital for every $1.00 spent on labor in 2020.
The sector depends on a variety of depreciable assets to accomplish repetitive operations, including automated machinery, resulting in minimal depreciation expenses.
Nonetheless, many jobs, such as the design and manufacturing of some of the industry’s products, need physical labor.
In addition, specialized labor is required by industry operators to manage manufacturing lines and conduct research and development. This industry’s capital intensity is predicted to stay low to moderate through 2025.
Due mostly to its small size, the Automatic Fire Sprinkler System Manufacturing industry has some degree of revenue volatility. Industry performance is directly tied to the level of activity in downstream construction markets since new buildings generate the majority of demand for industry products.
Although construction levels have fluctuated in the five years to 2020, they have ultimately trended upward as both residential and nonresidential construction activity grew in line with the overall economy.
Furthermore, the sector is heavily reliant on exports. As a result, swings in exchange rates affect company earnings, making exports more or less inexpensive to international customers.
The value of the US dollar in relation to other major currencies has changed little during the last five years, maintaining low until 2014 before surging significantly. The recent rise in the value of the US dollar has lowered export competitiveness and put downward pressure on total revenue growth.
The research forecasts revenue volatility to decrease over the next five years as domestic building markets stabilize. Revenue will fluctuate moderately in accordance with regular cyclical changes in the construction and currency markets.