The Electronic Goods Recycling industry, which operates facilities for separating and sorting recyclable materials from nonhazardous electronic waste (e.g. computers and TVs), has performed well over the five years to 2013. Industry performance is largely contingent upon demand from primary metal manufacturing, industrial production, regulation of recycling operations and disposable income. “As the recession cut into consumer demand for electronic products, demand for electronic goods recycling dropped accordingly,” says IBISWorld industry analyst Agiimaa Kruchkin. “Nevertheless, production of items manufactured with recycled electronic goods has grown during the past five years due to shifts in consumer preference toward environmentally friendly products.” Consequently, IBISWorld estimates that revenue will increase at an average annual rate of 8.6% over the five years to 2013 to reach $7.0 billion. As disposable income and industrial production continue to ramp up, revenue from electronics recycling is expected to grow 3.4% in 2013 alone.
During the recession, revenue volatility became a concern for Electronic Goods Recycling industry players; many participants sought to consolidate operations to stabilize and achieve greater economies of scale. Consequently, the pace of industry consolidation has increased during the five years to 2013. The industry is highly fragmented; the only major company holding a significant market share is Sims Metal Management. “The low value-to-weight of most recycled electronic goods drives up transportation costs,” adds Kruchkin. “As a result, this factor has limited the geographical range that most businesses operate in and the economies of scale available to operators from increasing their market share.” The industry is highly localized, and while large retailers have established programs for recycling, these companies pass the products on to a local company to handle the recycling. Industry concentration is expected to further increase due to the rising capital requirements of industry operators.
The industry is anticipated to experience healthy growth over the five years to 2018. As the US economy strengthens, industry revenue will likely continue increasing strongly. As more recycling legislation is enacted and government regulations rise, industry operators will benefit from the push for downstream manufacturing industries to use more recycled goods. In addition, purchases of electronic goods are expected to remain high, driving demand for recycling of old and obsolete products. Similarly, higher demand for products made with recycled goods will further aid industry performance, boosting the overall market for recycled goods and helping stabilize revenue volatility. For more information, visit IBISWorld’s Electronic Goods Recycling in the US industry report page.
Source: IBIS World