Metal Coating, Engraving & Heat Treating

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Industry Structure, How Firms Opertate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Quarterly Insight, Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 5,100 metal finishing companies in the US provide finishing services for manufacturing and construction customers. Major revenue categories include metal coating and engraving; electroplating, plating, polishing, anodizing, and coloring; and metal heat treating. Companies provide finishing services for customer-supplied metal goods and may sell finished metal goods. Some companies offer finishing services for alternative materials, such as plastics and composites.

Hazardous Waste and Processes and Government Regulation

The metal finishing industry is highly regulated because processes often involve dangerous chemicals and generate hazardous waste.

Customer In-House Capabilities

Companies may compete with manufacturers that opt for in-house metal finishing activities instead of outsourcing to a third party (“captive finishing”).

Industry size & Structure

The average metal coating, engraving, and heat treating service provider works out of a single location, employs about 25-26 workers, and generates $5-6 million annually.

    • The metal coating, engraving, and heat treating services industry consists of about 5,100 firms that employ about 129,700 workers and generate about $28 billion annually.
    • Most categories of the industry are concentrated, with the top 50 companies accounting for about 59-66% of industry revenue. The electroplating, plating, polishing, anodizing, and coloring sector is less concentrated, with the top 50 companies accounting for 34% of sector revenue.
    • Companies that specialize in metal coating and engraving account for about 47% of firms and 54% of industry revenue. Companies that specialize in electroplating, plating, polishing, anodizing, and coloring account for about 41% of firms and 27% of industry revenue. Companies that specialize in metal heat treating account for 12% of firms and 19% of industry revenue.
    • Large companies include Material Sciences Corporation, Metal Improvement Company (Curtiss-Wright Surface Technologies), and Bodycote. Some large companies are owned by foreign companies or have international operations.
                                      Industry Forecast
                                      Metal Coating, Engraving & Heat Treating Industry Growth
                                      Source: Vertical IQ and Inforum

                                      Coronavirus Update

                                      Apr 29, 2022 - Vehicle Production on the Rise
                                      • US car production, an indicator of demand for metal coating, engraving and heat treating, increased to 1.86 million units in March from 1.49 million units in February, according to the Federal Reserve. Longer term, US car production is projected to trend around 2.7 million units in 2023 and 2.8 million units in 2024, according to Trading Economics. Low inventories and rising interest rates are boosting car prices amid high demand, resulting in double-digit declines in auto sales. US retail sales of new vehicles in April could fall 23.8% to 1.1 million units from a year earlier, according to projections from J.D. Power and LMC Automotive.
                                      • Demand for manufactured goods, a driver of demand for metal coating, engraving, and heat treating, is projected to increase. The National Association of Manufacturers’ (NAM) Outlook Survey for the first quarter of 2022 (conducted from Feb. 11–25) found 88.8% of respondents felt either somewhat or very positive about their company outlook, up from 86.8% in the fourth quarter. Respondents expected production to increase 5.6% over the next 12 month, up from 4.8% in the previous survey. Almost 83% forecast output to rise over the coming months, with 7% seeing declining production. Medium and large manufacturers felt the most optimistic, anticipating 6% growth in production over the next 12 months. In contrast, small businesses expect output to rise 4%.
                                      • March new-vehicle sales, an indicator of demand for coating, engraving and heat treating, were forecast to fall more than 24% compared to a year earlier. Auto sales are expected to start the year slow and build momentum, according to Cox Automotive. Sales are constrained by low inventory, low incentives, and high prices. The ongoing semiconductor shortage is limiting vehicle production. Some auto manufacturers anticipate the shortage will last through 2022.
                                      • Calls for more resilient production chains may benefit metal coating, engraving, and heat-treating firms if more manufacturing is on-shored, but in the industries studied by multinational banking and financial services firm ING, the sheer number of suppliers and their concentration in specific regions present major obstacles to diversifying risks. Supply chains in the automotive industry, for example, consist of a large group of specialized suppliers that are clustered within regions. With thousands of suppliers involved in a vehicle’s value chain, diversifying suppliers to increase resilience involves considerable ongoing costs. Suppliers used only as backups need to be able to produce to detailed specifications and meet quality and safety standards at any time. ING doesn't foresee an industry-wide move to reconfigure existing automotive supply chains because the costs are simply too great, and automotive manufacturers’ margins can't absorb the higher costs of more resilient supply chains.
                                      Get A Demo

                                      Vertical IQ’s Industry Intelligence Platform

                                      See for yourself why nearly 40,000 users trust Vertical IQ for their industry research and call preparation needs. Our easy-to-digest industry insights save call preparation time and help differentiate you from the competition.

                                      Build valuable, lasting relationships by having smarter conversations -
                                      check out Vertical IQ today.

                                      Request A Demo