Industries to watch in 2013

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Business information analysts have revealed the five industries expected to soar this year, and the five expected to have their wings clipped. Where are your clients invested?

Industries to fly

Oil and Gas Production

The oil and gas production industry has been highlighted by IBISWorld as this year's top industry performer. They forecast the sector to grow by 15.9% to reach $44.4 billion in 2013.

IBISWorld General Manager in Australia Karen Dobie said Australia's liquefied natural gas production and exports are expected to increase significantly over the coming year.

“This reflects a switch in favour of gas for electricity generation, which will be driven by more volatile demand and carbon pricing on oil, and an expected increase of 8.4% in US dollar crude oil prices."

Organic Farming

Organic farming has grown at a compound annual rate of 10% since 2008, and is expected to continue to rise as consumers factor in the health benefits and environmental impact of their food choices. IBISWorld forecasts an increase of 12.5% across the industry over the coming year, boosting revenue to $617 million.

"Consumers are becoming increasingly eco and health conscious. This means they are more willing to pay a premium price to prevent environmental degradation caused by conventional farming methods and to ensure the products they consume are free from added chemicals and hormones", said Dobie

Online Education

IBISWorld anticipates revenue for Australia's online education industry to increase by 10.5% in 2013, to reach just under $5.6 billion.

"We are seeing an increase in demand for convenient education, particularly among working adults who wish to gain new skills and qualifications, but are too time poor to attend classes full-time or in person", said Dobie.

"The NSW Department of Education is also assisting industry growth, with technologies expanding at a rapid rate to deliver education to remote parts of Australia."

Online Shopping

Forecast to grow by 9.1% to reach almost $11.8 billion in 2013, the online shopping industry has continued to flourish as consumers demand more of their goods and services via the online realm.

Over the coming year, IBISWorld expects online retailers to move into the bricks-and-mortar space, providing convenient pick up and return locations for consumers.

"This phenomenon will lead to a greater increase in the convenience provided by online retail", said Dobie.

Multi-Unit Apartment and Townhouse Construction

Strong population growth in the late 2000s has fuelled underlying demand for housing, in particular for the multi-unit apartment and townhouse construction industry, which is forecast to grow 9% over the coming year to reach $16.6 billion.

"Property investors – primarily funded from Asia – kick-started new apartment projects in 2010 and 2011. This, coupled with several interest rate cuts since November 2011 and the flow through of government assistance to both homebuyers and investors, is projected to have a buoyant effect on the industry.”

Industries to fall

Gaming and Vending Machines Manufacturing

The gaming and vending machines manufacturing industry is set to follow suit in the overall decline of manufacturing in Australia, with revenue expected to fall by 6.4% in 2013.

"The replacement cycle for gaming machines in Australia has increased from 12 years in 2005 to 35 years since 2008,” said Dobie.

“This, along with legislative limits on the number of poker machines, has restricted demand for new machines.”

Wired Telecommunications Carriers

Intense competition in the mobile space continues to have a negative effect on wired telecommunications carriers. The industry is expected to fall by 5.5% in 2013, bringing total revenue down to $9.7 billion, from its peak of $21.5 billion in 2002.

Prices for the industry's services continue to be cut in attempts to retain clientele.

"Consumer confidence with email and SMS has grown significantly over the past five years, causing customers to move away from the traditional home phone. Branding and cross selling are becoming increasingly vital to the industry, with product bundling being a popular strategy to reduce customer turnover rates," said Dobie.

Mineral Exploration

Revenue for mineral exploration is expected to fall to $3.7 billion over the coming year, a decline of 5.1% from 2012 – driven by falling investment (forecast to decrease by 6.5%) in the sector as firms shift their focus to production.

"The combination of generally lower commodity prices, weak global growth, slowing demand from China and economic uncertainty is expected to result in reduced spending on mineral exploration over 2013.”

Newspaper Printing or Publishing

As advertisers and consumers opt for other types of media, the newspaper printing or publishing industry continues to lose advertising market share – with revenue forecast to decrease by 4% in 2013.

Printed newspapers' share of advertising – which accounts for 75% of newspaper revenue – is expected to fall to under 30% of total advertising revenue in 2013, down from a 41.8% share in 2000.

Recorded Media Manufacturing and Publishing

Recorded media manufacturing and publishing, including CDs and records, has declined steadily over the past five years. IBISWorld expects this trend to continue, forecasting a decline of 2.8% in 2013.

Physical format music sales have dropped by an estimated compound annual rate of 15.9% since 2007, compared with a compound annual rise of 32.6% for digital music.

 

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