Report: Federal stimulus will drive $1.46 billion to composites industry

A new report from Lucintel says construction, wind and mass transportation stand to gain the most from the Obama Administration's stimulus plan.

Market research firm Lucintel (Irving, Texas, USA) reports that despite a significant downturn in the U.S. construction market and a slowdown in wind energy, the economic stimulus package announced by the Obama administration is likely to drive composite market growth. Out of $787 billion of stimulus package, $103 billion of ARRA (American Recovery and Relief Act) investment is likely to affect composites-related end markets such as construction, wind and mass transportation. In terms of composite products such as bath tub, doors, rebar, and wind blades, Lucintel estimates that the cumulative effect on the composites market is likely to surpass $1,460 million. Primary segments with potential impact from the ARRA are wind, construction and mass transportation.

The results of this study are in Lucintel just-published report, titled, “Effects of the 2009 Economic Stimulus Package upon Composites and Related Markets.”

According to the study,  despite the collapse of private demand, companies have been steadily increasing capabilities in anticipation of ARRA led growth. However, based on the available opportunities, some companies are realigning capabilities based on expected growth by segment and expected long lead times that might result through government-related opportunities. Companies also need to deliberate on effects of longer sales cycles (6 months to 2 years) and the preference of functionality over brand, both of which are key aspects of government markets.

Siemens, one of 16 companies selected by the U.S. Department of Energy to overhaul efficiency of federal buildings, has already started aligning competencies and forging new relations. Other leading players such as Philips and Sun Microsystems have also been actively involved in understanding the dynamics of government markets creating deliberate strategies to develop and maintain competitive advantage.

However, while many companies strive to carve out competitive advantages for ARRA funding, Lucintel analysts contacted several composite fabricators and found many are making little effort to take advantage of stimulus funding.  Repeated interviews echoed hope that the ARRA would provide stimulative effects to the composites industry, although respondents remained skeptical until revenue was generated that could be attributed to the ARRA. Due to the size and scope of the stimulus package and the opportunity it presents for composites, quick and effective positioning can provide direct competitive advantage.

This research report contains sections, need for stimulus package, provisions of the American Relief and Recovery Act 2009, impact on the U.S. composites marketplace, composite forecasts and observations for U.S. wind energy, composites observations in infrastructure and many other elements, all of which can help you to make confident business decisions in this globally competitive marketplace.