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As companies continue to invest in research and development in order to improve product functionality and stay competitive, newly developed high-tech product lines will likely buoy overall industry profitability. For these reasons, industry research firm IBISWorld has updated a report on the Drug and Alcohol Test Kit Manufacturing industry in its growing industry report collection.
New York, NY (PRWEB) February 07, 2014
After bursting onto the scene in the late 1990s and experiencing explosive revenue growth throughout the early 2000s, the Drug and Alcohol Test Kit Manufacturing industry has experienced a lull in the five years to 2014. As the recession hit, demand for alcohol decreased, as consumers with less disposable income cut back on purchasing discretionary beverages such as liquor. This decrease in disposable income also affected consumers' and institutions' ability to purchase drug and alcohol test kits, according to IBISWorld Industry Analyst Jocelyn Phillips. Where demand did not dry up altogether, customers largely switched from high-accuracy, multi-drug products to the industry's more affordable, simpler offerings. As a result, industry revenue has grown at an average annual rate of only 0.9% over the five-year period to $1.1 billion in 2014.
Industry growth is expected to pick up in the five years to 2019, however, as total industry revenue is expected increase 1.2% in 2014 alone. International trade is a significant component of overall industry activity, with exports accounting for 33.0% of total industry revenue in 2014 and imported drug and alcohol test kits satisfying 27.4% of domestic demand for industry products. IBISWorld expects both import and export markets to grow over the period, stimulating US production and encouraging new companies to enter the industry.
Rising industry profit margins will likely also encourage new industry entrants, says Phillips. As companies continue to invest in research and development in order to improve product functionality and stay competitive, newly developed high-tech product lines will likely buoy overall industry profitability. These improved products, which have already begun entering the market during the past five years, offer consumers increased functionality, quicker result returns and fewer false positives. Because these products offer improved capabilities and are often the result of highly innovative technical research, companies can largely demand a higher price for them. As consumer disposable income levels rebound in the next five years, customers will likely be more willing and able to pay these higher prices, driving company and industry margins higher.
For more information, visit IBISWorlds Drug and Alcohol Test Kit Manufacturing in the US industry report page.
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IBISWorld industry Report Key Topics
This industry manufactures home diagnostic kits that test for the presence of alcohol or drugs of abuse in an individual. This industry's products are intended for home use, although some tests may require a tester to send a sample to an authorized laboratory.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
About IBISWorld Inc.
Recognized as the nations most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.
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