Business looks good for 2015

After a year of stability and returning to normal, all the signs are pointing to a stronger gun trade for the coming year.

With first-quarter results in from many companies and organisations, plus the footfall from notable ventures including the SHOT Show and IWA trade events, everything is looking good for the rest of 2015 and beyond.

SHOT show in the USA, of course, boasted its second highest attendance ever (almost 64,000) while more than 100 countries were represented, enhancing the global picture for the gun trade.

Meanwhile, IWA organisers revealed that more than 1,300 exhibitors welcomed over 41,000 visitors to Nuremberg during four days in March, another huge figure.

Globally, the legal-small-arms market is forecast to grow from $4.1 billion in 2014 to $5.3 billion in 2020, a compound annual growth rate of 4.2 per cent, according to projections in a new industry report from MarketsandMarkets (M&M), a US-based market researcher.

The projections reflect sales of small arms in the hunting, sport shooting, self-defence, law enforcement and professional markets.

This covers products including pistols, rifles, machine guns and carbines.

According to M&M, there are five major gun-manufacturing firms (all based in the USA) which account for more than 40 per cent of the total market.

Shares of two have shown significant gains already – Smith & Wesson is up about 40 per cent, while Sturm Ruger has risen by almost 50 per cent.

According to CRT Capital analyst Brian Ruttenbur, who follows the major gun makers, the USA represents 41.2 per cent of the legal global small-arms business and is the world’s leading exporter and importer of small arms.

Interestingly, CRT Capital estimated that US gun sales were down about 15 per cent in 2014 compared to the previous year which, of course, had enjoyed a boom time following President Obama’s declared intent of further regulation against shooters and the industry at large.

Brian also believes that the current US small-arms market stands at roughly $8 billion annually, including new firearms sales but excluding accessory sales such as gun sights, cleaning supplies and so on.

Another key statistic comes from the FBI’s National Instant Criminal Background Check System – used by retailers across the USA to quickly and easily check whether a buyer is eligible to purchase a firearm – which posted an 8.4 per cent year-over-year increase in activity in January.

That figure is said to account for the second-highest January on record for the 16-year-old system and marked the fourth consecutive monthly increase of year-to-year growth in the FBI’s numbers since September 2013.

Sturm Ruger CEO Michael Fifer said in a recent conference call on the latest figures: “We believe that the decline in consumer demand for firearms caused many retailers to buy fewer firearms in the third and fourth quarters of 2014 than they were actually selling, in an effort to reduce their inventories and generate cash.

“The decline in demand from the distributors was exacerbated by extensive discounting by our competitors, which, in particular, reduced our share of the large chain store Black Friday business.”

But he added: “For 2015, we are starting to see some early indications that demand from retailers to distributors is improving. We think that demand in 2012 before the huge surge in demand in 2013 is a good starting point for comparison.”

Meanwhile, data just released from the General Social Survey, a top research body, shows that last year, the number of American households owning guns remained at 40-year lows.

In 2014, guns were present in fewer than a third of US households (32 per cent) it said. That’s 22 percentage points lower than the high of 54 per cent back in 1977.

It seems that the market for all these guns is existing shooters; the products being added to the stockpiles of people who already own guns.

If gun sales are up and household-level ownership rates – according to many different surveys – are down, that appears to be the only logical conclusion.

 

Read 4372 times

Digital Magazine



Gear Guide

Latest Videos

  • Wiley X Eyewear test movie