Industry Analysis & Industry Trends
The industry relies heavily on long-term rolling stock replacement contracts. These contracts have long lead times and involve periodic payments throughout the manufacturing process followed by a balloon payment when the project reaches completion. This creates revenue and profit volatility and means that industry trends often go against underlying passenger demand or economic circumstances. Over the five years through 2015-16, industry revenue is expected to grow at a compound annual rate of 0.9% to reach £1.5 billion. Over the period, Bombardier remained the only major train manufacturer in the United Kingdom with a market share of over 50%. Therefore, industry trends largely reflected the performance of Bombardier... purchase to read more
Industry Report - Industry Investment Chapter
The level of capital intensity is determined by comparing the human and capital equipment factors of production, using wages and depreciation costs as proxies. Comparatively high depreciation costs indicate substantial investment in depreciable assets, such as buildings and equipment, resulting in high capital intensity. Conversely, comparatively high wage costs indicate high labour intensity.
The Railway Equipment Manufacturing industry displays a moderate level of capital intensity, with approximately £3.19 spent on wages for every £1.00 spent on capital. Manufacturing is relatively capital intensive as it has high capital costs because of the requisite machinery and factories. However, the level of capital intensity varies considerably between operations. For.. purchase to read more