The trailer industry is heading for a big year in 2016, with increases in highway project funding and lower fuel costs signaling industry growth. Here is a breakdown of some of the factors influencing the trailer industry in the coming year.
The FAST Act
In December of 2015, President Obama signed the Fixing America’s Surface Transportation Act into law. The law provides $302B in funding through 2020, mostly for highway and roads projects.
This will cause a trickle-down effect to equipment manufacturers, and the Associated Equipment Distributors estimates 6.4 cents in equipment industry growth for every dollar spent on infrastructure. It will also create new business opportunities with the increase in demand for trailers for construction projects.
Low Fuel Costs
The cost of gasoline has been dropping steadily in the last 4 years, reducing the overall costs for the transportation industry. Trailer manufacturers and their supply chains are benefiting from the reduced costs that give the industry more capital to work with.
Trailer Demand High
Due in part to these factors and increased spending, the market value for trailer manufacturers is at an all-time high. But with such a significant increase in demand, the productivity gains may not be able to keep pace with the higher competition from manufacturers. This will likely lead to some market consolidation as manufacturers merge with or acquire competitors.
The trailer industry works with strict safety standards, and manufacturers rely on third-party support like Austin Hardware for specialty trailer parts like hinges and latches. Smaller suppliers of these parts will need to prepare their inventory for increased demand, and the larger suppliers will have the opportunity for mergers or acquisitions as the industry adjusts to this increase in demand.
Overall, 2016 will be a dynamic year for the trailer industry and third-party distributors like Austin Hardware. If you’re in the trailer manufacturing industry, having a partner like Austin will keep your inventory stocked and ready to meet the growing demand and stay competitive in the market. Contact us today to see how we can help you.