IBISWorld report indicates that government & private funding is expected to boost revenue for the US dredging industry.
Excerpts from the report are as follows:
A weak economy has made growth for dredgers slower than expected. Nevertheless, increased government and private-sector funding is expected to boost revenue for the industry over the next five years.
While lacking in prominence, the Dredging Services industry is an essential part of the US economy. This is because two vital sectors of the US economy – maritime tourism and international trade – depend heavily on dredging services. Additionally, dredging services play an important role in restoring and preserving wetlands, coastlines and maritime habitats. As such, the industry benefits from public and private restoration projects.
According to IBISWorld industry analyst Kevin Boyland, strong underlying demand for dredging services is expected to grow industry revenue 2.8% to $2.2 billion in 2012.
The US dredging industry is highly fragmented and is characterized by its many small operators. Larger operators focus on capital dredging projects that are usually awarded through competitive bidding. Smaller dredging firms tend to service inland areas and focus on rivers and lakes. The majority of dredging services are privately held. Federal funds allocated toward dredging services are provided by Congress through the Harbor Maintenance Trust Fund (HMTF) and administered by the US Army Corps of Engineers. Over the past five years, funds allocated toward dredging services have been insufficient to meet demand, even though the HMTF is operating at a surplus, says Boyland.
While $1.9 billion in stimulus funds earmarked for dredging services benefitted the industry in 2009, US ports, harbors and waterways have been insufficiently dredged due to a weak economic environment and a budgeting deadlock on Capitol Hill. Consequently, industry growth has not been as strong as it could have been over the past five years. Nevertheless, over the five years to 2012, IBISWorld estimates that industry revenue will increase at an annualized rate of 4.6%.
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