Industries set to fly and fall in 2013-14

As Australian companies prepare for the new financial year, IBISWorld has released its annual list of the industries set to soar and sink in 2013-14.

Superannuation funds top the list of growth industries with an impressive 40.5% rise anticipated in 2013-14, followed by iron ore mining, wind and other electricity generation, online shopping and internet publishing and broadcasting.

The industries that might prefer the new financial year not to start at all include video and DVD hire outlets, automotive electrical component manufacturing, heavy industry and other non-building construction, book publishing and mineral exploration, as these industries are forecast to decline.

Industries to fly

1. Superannuation funds

Superannuation funds are expected to have revenue of $324,582.2 million in the next year, a 40.5% rise.
Though these markets are highly volatile, the sharemarket drops in 2012-13 mean we’re starting the new financial year from a low base – a good position from which to generate solid returns.

Rising superannuation revenue will also be a result of low unemployment and the 0.25% increase in compulsory contributions this financial year.

2. Iron ore mining

IBISWorld forecasts revenue growth of 22.9% for iron ore mining this financial year due to growing demand for steel from emerging nations like China.

While there’s currently an oversupply of iron ore, we expect that this capacity will be absorbed this year and demand will outpace supply. This will cause a rise in prices – the primary driver of forecast revenue growth.

Mining capacity is also likely to rise this year as a result of increased industry investment in mining sites, such as BHP Billiton’s Jimblebar mine and Rio Tinto’s Brockman 4 and Western Turner Syncline sites. 

3. Online shopping

One of the key performers in recent years, online shopping is forecast to post solid growth of 13.3% this year. Demand will be influenced by factors such as rising rural high-speed internet penetration thanks to the roll out of the National Broadband Network, the number of traditional retailers joining the online space and measures to boost the convenience of product collection.

A number of initiatives to expand product delivery and collection options are adding to the appeal of the e-tailing sector.

Some online retailers have set up traditional outlets to act as collection points, while established players are providing lockers at convenient locations so customers can collect their goods in their own time – particularly appealing for those not at home to collect deliveries during office hours.

4. Internet publishing and broadcasting

In 2013-14, IBISWorld anticipates Australia’s internet publishing and broadcasting industry will grow by 12.7%.

Success in this industry is largely a result of developments in internet access and speeds from newer devices and rising internet penetration.

Accelerating internet speeds and growing accessibility are allowing segments such as audio and video streaming to attract additional users, while increasing consumer and business expenditure will generate more revenue for paid subscription services. The simplicity of setting up operations makes it an increasingly viable business proposition for existing publishers to move online.

5. Wind and other electricity generation

Strong industry assistance via the federal government’s Renewable Energy Target scheme (which mandates a minimum amount of energy key users must purchase from renewable sources) is driving growth for wind and other electricity generators, which IBISWorld forecasts will be 11.3% in 2013-14 – unless there is significant policy change.

Lack of community support is still an issue for this industry, with many people concerned about the physical and aesthetic impact these projects will have on their living environment. Large energy users are also concerned about the commercial impact on large-scale project.

If a change in government alters the Renewable Energy Target, incentives for investment in renewable energy will decrease, minimising the scale of the industry’s activities.

This article continues on page 2.

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