Organic farmers set to prosper while paper manufacturers suffer; IBISWorld reveals which industries will sink or swim in coming year
June 23, 2010
Organic farmers and insurance brokers will fair well over the coming year while insulation services and video hire outlets are tipped to struggle, according to IBISWorld.
The leading business information provider has released a report on the top five industries to fly and fail in 2010-11; citing various social, environmental and consumer trends as influencing factors.
TOP FIVE
Australia’s top five growth industries for the next 12 months include: organic farming; online information services; insurance brokers; mobile telecommunications carriers; and alternative health therapies.
1. ORGANIC FARMING
IBISWorld forecasts ever-increasing health concerns, greater awareness of environmental sustainability and higher disposable incomes will support phenomenal growth of Australia’s organic farming industry.
Revenue will reportedly grow by 15.1 percent to $450 million, while employment with grow by 2 percent.
2. ONLINE INFORMATION SERVICES
Coming in at second on the ‘top five’ list is online information services, which is tipped to see an 8.7 percent increase in revenue growth to $1.56 billion in the coming year.
Employment will reportedly grow in line with this increase, up by 7.3 percent.
IBISWorld says an increased use of mobile devices such as smartphones and Apple’s iPad will result in a big increase in Australians accessing of online information on the go.
3. INSURANCE BROKERAGE
Rapid growth in premium pricing as Australian insurance carriers strive to recoup underwriting capacity lost on recent investment activities will result in “substantial” revenue growth for brokerage firms, according to IBISWorld.
Revenue is tipped to grow by 7.2 percent to $11.20 billion, while employment growth and wage growth will rise by 2.4 percent and 3.1 percent respectively.
4. MOBILE TELECOMMUNCATIONS CARRIERS
Mobile telecommunications carriers are set to benefit from growing demand among Australians for mobile internet data subscriptions over the coming year.
Revenue is forecast to grow by 6.9 percent to $19.6 billion, while employment will rise by 0.8 percent.
5. ALTERNATIVE HEALTH THERAPIES
Coming in at the number five on the top growth industries for 2010-11 is alternative health therapies.
With predicted revenue growth of 6.5 percent, total revenue of $3.46 billion and employment growth of 4.3 percent, it appears holistic approaches to health will become even more popular within Australia in the coming year.
IBISWorld says growing acceptance of alternative therapies coupled with increasing coverage of such treatments by private health insurance providers is the key to this industry’s continuing success.
BOTTOM FIVE
At the other end of the scale, IBISWorld says insulation services; wired telecommunication carriers; paper manufacturing; video hire outlets and grape growing industries will find conditions over the next year particularly difficult.
1. INSULATION SERVICES
IBISWorld forecasts Australian insulation services will be out in the cold, at least for the next two years, as a consequence of the Federal Government’s abrupt withdrawal of the subsidy which had been the major catalyst for the growth experienced by the industry following Labor’s 2007 election victory.
Revenue is tipped to fall by 24.1 percent to $840 million, while employment growth will be hit considerably, dropping 55.6 percent.
2. WIRED COMMUNICATIONS CARRIERS
While mobile telecommunications carriers are set to prosper as a result of changing consumer habits, wired communications carriers are set to suffer.
Revenue is topped to fall by 4.8 percent to $11.1 billion, and employment will drop 4.7 percent.
The pricing war has not only reduced the revenue of wired telcos but also eroded their profitability, forcing them to slash jobs and wages, according to IBISWorld.
1. PAPER MANUFACTURING
IBISWorld forecasts Australian paper manufacturers will take a hit as consumers migrate from print to electronic media, with revenue expected to drop 3.1 percent to $2.68 billion.
Accounting for 24 percent of the paper manufacturing industry’s downstream demand, newspapers, book and magazine publishers have struck a major competitive obstacle in written content moving online and to electronic devices.
On a positive note, employment is tipped to grow by 2.9 percent.
4. VIDEO HIRE OUTLETS
There are tough times ahead for video hire outlets, as the electronic distribution of video content, including Internet streaming and downloads (legal and illegal), increases.
IBISWorld says revenue could fall as much as 3.1 percent to $1.04 billion, while employment slumps by 1.6 percent.
Other factors contributing to this result include the popularity of pay television and the increasing volume of free-to-air content via digital channels which is positioning itself more competitively to video hire stores.
5. GRAPE GROWING
An unfavourable exchange rate and international competitive pricing pressures are set to hit Australian grape growers in 2010-11, according to IBISWorld.
Revenue is set to fall by 3 percent to $1.5 billion, while employment growth sits at a disappointing 0 percent.