Spring and Wire Product Manufacturers

Industry Profile Report

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

Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

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

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

Industry Profile Excerpts

Industry Overview

The 950 spring and wire product manufacturers in the US are divided into two segments: primary spring and wire producers and manufacturers that purchase primary spring and wire and process it into a wide variety of finished products ranging from chain link fence and automotive suspension springs to staples and watch coils.

Shift from Mechanical to Digital Products

The conversion of machinery and consumer goods from mechanical operation to digital has significantly impacted demand for some types of springs and wires.

Industry size & Structure

A typical spring and wire manufacturer operates out of a single location, employs 40-41 workers, and generates about $10-11 million annually.

    • The spring and wire product manufacturing industry consists of about 950 companies which employ about 38,400 workers and generate about $10 billion annually.
    • Most companies are small, independent operators - about 86% have a single location.
    • The spring manufacturing segment of the industry is somewhat concentrated in that the 20 largest firms account for 63% of industry revenue. The wire manufacturing segment is fragmented with the 20 largest firms representing 37% of industry revenue.
    • Large companies include Lee Spring (NY), Sterling Spring (IL), Elyra Spring & Stamping (OH), Marlin Steel (MD), Madsen Wire Products (IN).
    • While spring and wire product manufacturing takes place in nearly every state, the Midwest “rustbelt” has a high concentration with Illinois, Michigan, Indiana, Ohio, and Pennsylvania accounting for 35% of firms and 31% of revenue.
                                Industry Forecast
                                Spring and Wire Product Manufacturers Industry Growth
                                Source: Vertical IQ and Inforum

                                Recent Developments

                                Mar 17, 2023 - Factory Demand Slows
                                • Rising interest rates and the strong US dollar are putting the US manufacturing sector at risk, The Wall Street Journal reported in March. New orders for manufactured goods shrank for the sixth consecutive month in February, according to surveys by the Institute for Supply Management. Also, manufacturing output is down 1.7% from its post-pandemic peak in May 2022, according to a three-month moving average of Federal Reserve data, WSJ reports. The Fed’s aggressive interest rate hikes are raising the cost of borrowing – making machinery purchases more expensive – while the strong dollar is depressing US exports. “As the Fed continues to hike, manufacturing is going to be in the crosshairs,” Jonathan Millar, senior US economist at Barclays PLC told WSJ. “It’s hard to see this sector not suffer some sort of a downturn that is more significant than what we’ve seen already.”
                                • The shortage of construction workers is expected to top 500,000 this year, according to a February news release from the Associated Builders and Contractors (ABC). The construction industry will need to attract an estimated 546,000 additional workers on top of the normal pace of hiring in 2023 to meet the demand for labor, according to ABC’s proprietary Construction Spending and Employment Forecast. While construction employment has largely recovered from its pandemic-driven dip, it still isn’t where it needs to be. Moreover, in 2024, the industry will need to bring in more than 342,000 new workers on top of normal hiring to meet industry demand, presuming that construction spending growth slows significantly next year. Per ABC’s model, which converts anticipated increases in construction outlays into demand for construction labor, $1 billion in additional construction spending creates approximately 3,620 new jobs.
                                • Total US construction starts will drop 3% when adjusted for inflation to $1.08 trillion this year, according to the 2023 Dodge Construction Outlook. The report projects commercial starts, such as retail, office, warehouse and hotel projects, to fall 13% this year when adjusted for inflation, led by pullbacks in the warehouse and office sectors. Residential construction, discouraged by rising mortgage rates, is also expected to decline. However, manufacturing, infrastructure and alternative energy-related projects are expected to fare better due to public funding. Customer industries for spring and wire product makers include electric utilities, construction, and a broad range of distributors and manufacturers.
                                • Warehouse and distribution center operators expect to spend less on capital expenditures this year, reversing a three-year trend of rising capex budgets, a recent survey found. When asked about their capex plans for 2023, respondents to the annual survey conducted by Peerless Research Group for Logistics Management and Modern Materials Handling reported it was less than for 2022. Pandemic-related e-commerce growth and supply chain concerns drove robust growth in warehouse and dc space, increasing the demand for spring and wire products used in conveyor systems with belts made from woven metal wire or chain. Now, as the pandemic eases, slowing online sales are weakening demand for space. E-commerce giant Amazon in September 2022 said it is canceling, closing and delaying plans for new warehouse space. There are still signs of sizable automation budgets and interest in warehouse technology, according to the survey.
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