The wire and cable industry might be mature, but there are still plenty of growth markets, including telecommunications, construction, and automotive. But prices for steel, copper, and metals will be heavy directional influencers. Raw material volatility poses among the greatest threats to stable prices and production costs in many cable and wire markets, experts say. But positive news in the construction and telecommunications sectors, upon which much of the growth of these markets depends, promises to keep prices steady in the next few years. Cable and wire markets are incredibly diverse and broad, with their biggest end-users being telecommunications and power companies. Their applications are ubiquitous across so many industries, including commercial and residential construction. Some of the most common components include rubber, copper, aluminum, and various plastics, including thermoplastic and thermosets. These markets are characterized by a vast and diverse range of manufacturers and suppliers across the world. Because marketing costs for electrical cables, non-electric iron and steel wire, and mechanical cables are historically very low, producers typically invest most in innovation, according to IBIS World. Moreover, price competition is stiff because of the sheer number of producers, as well as the plethora of cheaper foreign producers. IBIS World reports that electrical cable products are in the growth phase of the product life cycle and include coaxial cable, halogen-free cable, multi-core cable, and axial cable. Manufacturers, wholesalers, and retailers -- both foreign and domestic -- are all major suppliers. Mechanical cables, which are widely used for lifting, towing, or hauling, are generally produced with high-carbon and stainless steel as well as nonferrous metals. Mechanical cables are used heavily in the construction, mining, and oil drilling industries. Suspension bridges use an extensive amount of mechanical cable. Non-electric iron and steel wire end-products include low- and high-carbon, hand-drawn, and stainless steel wire, as well as wires that are stranded, oil tempered, or used in pre-stressed concrete applications, according to the firm. Recent History, Current Market Conditions Like most sectors, wire and cable markets continue to recover from the global recession a few years ago. Because a substantial portion of sales depends on commercial and residential construction, as well as the automotive industry, they were hit hard. In 2009, the total value of nonresidential construction plunged over 21 percent (and another 15.6 percent the following year), with residential construction also falling about 4 percent, according to IBIS World. In 2012, the strongest post-recession recovery year so far, things turned around because of pent-up demand. That year, commercial construction went north nearly 11 percent, eclipsed by a residential housing rise of more than 12 percent. Perhaps the brightest spot for cable and wire markets is in IT telecommunications. Take fiber-optic cable, whose high-speed properties led to millions of miles of it being laid across the country to support Internet and cable television improvements. That industry "bottomed out" around 2003 but has since ramped up at a healthy pace, according to Freedonia Group. In the near future, most of the demand will come from so-called "last-mile" applications, which are still primarily comprised of copper coaxial cable, the firm noted in a recent report. While domestic demand continues sputtering thanks to a weak dollar, sluggish consumer demand, and snail's-pace infrastructure spending, demand from developing countries in Asia are keeping profits healthy, according to Global Industry Analysts. The Asia-Pacific region, for example, is currently the fastest-growing regional market for insulated wire and cable in large part because of growing adoption Internet use and the emergence of Wavelength Division Multiplexing (WDM) technology, according to the firm. Nearly all wire and cable market sectors are characterized by overheads above 20 percent and slightly declining profits and wages, IBIS World reports. Here's a brief look at innovation and R&D, according to the analyst:
- Electrical cable -- Changing and growing energy and data processing demands (such as the call for superconducting power lines that can operate at high temperatures)
- Mechanical cable -- Improving strength and flexibility
- Non-electric iron and steel wire -- Improving tensile strength and corrosive resistance.