Online industries to power ahead in 2012: report

IBISWorld releases its list of the top five industries to both fly and fall in 2012

Online industries to power ahead in 2012: report
Online industries to power ahead in 2012: report
January 23, 2012

A growing trend towards web-based technologies has led to positive forecasts for online shopping and education this year, while certain manufacturing industries continue to face hurdles.

According to business analyst IBISWorld and its top five industries to ‘fly and fall in 2012’, diamond and gemstone mining is the frontrunner in terms of revenue growth.

Taking out number one position on the growth list, diamond and gemstone mining revenue is tipped to increase by 36.7 percent to $599.9 million.

This will be driven by stabilising prices and higher production levels, which are forecast to increase by 39.5 percent.

Coming in at second place is motor vehicle manufacturing which, according to IBISWorld, will grow by 14.3 percent to reach more than $11.9 billion in the coming year.

Although the industry continues to recover from the GFC, revenue is still expected to fall $5 billion shy of pre-financial crisis levels.

Increased internet usage by a time-poor population has also led to solid forecasts for both online education and online shopping this year.

IBISWorld expects revenue from Australia’s online education industry (number three on the list) to increase by 10.6 percent in 2012, to be worth just under $4.9 billion.

"Growth will be supported by the continued uptake of high-speed internet services, growing acceptance of online education, government financial support of students and efforts to expand access beyond the typical school leaver demographic," the report says.

Meanwhile, online shopping continues to show its resilience to the downturn experienced in bricks-and-mortar retailing.

According to IBISWorld, online shopping will grow by 10.2 percent to reach revenue of $10.4 billion – representing around 5 percent of the total retail sector.

It rounds out the list of top growth industries at number five.

Biotechnology came in at fourth position; tipped to grow by 10.3 percent in 2012 to reach over $2.4 billion as more big-name players invest in Australian technologies.

While resources and the online realm continue to drive Australia’s economy, IBISWorld says a number of industries will struggle to gain traction this year.

Most significantly, weaker global economic conditions and a strong Australian dollar will see exports of iron and steel decline by more than 45 percent over the coming year.

IBISWorld forecasts revenue for iron and steel manufacturers to fall by 14.9 percent to $7.6 billion.

Coming in at second place is institutional building construction, which is expected to decline as governments cut spending on new construction and as major projects come to completion.

In 2012, industry revenue is expected to fall by 9 percent to reach $10.3 billion.

Cotton ginning, which separates cotton fibres from the cotton seed, is expected to return to more standard production levels in 2012, following a strong year in 2011.

The industry is tipped to record a 7.7 percent decline in revenue, to $2.5 billion.

Flower growers are also expected to face another tough year, with IBISWorld forecasting industry revenue will fall 4.3 percent.

Worth $456.4 million in 2002, Australia’s cut flower growing industry is expected to earn just $297.2 million in 2012 – almost half its value 10 years ago.

The decline is due to an increasing percentage of production being sold through supermarkets, as well as the conservative nature of consumers towards such discretionary products.

Rounding out IBISWorld’s list of five key industries to fall in 2012 is pulp, paper and paperboard manufacturing.

This particular industry has been flagged as it struggles to remain relevant as more Australians trade-in printed books and other documents for iPads and e-readers.

The decrease in demand for industry products will see revenue fall 3.7 percent over the coming year to $3.1 billion.

IBISWorld’s latest forecasts were published in a special report, Industries to fly and fall in 2012,
released this month.

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