Economy

Representing the members is big business

SmartCompany /

Business and professional associations are big business, with annual revenue of close to $3.8 billion and steady growth forecast for the next few years. By JASON BAKER.

By Jason Baker

Despite their origins as not-for-profits, business and professional associations in Australia are big business. IBISWorld estimates industry revenue of close to $3.8 billion for the nation’s 5815 professional and representative bodies in 2006 and average growth of 2.3% in the coming five years.

The core task of professional and business associations is to represent and promote the interests of their members in industry and government forums. The largest player in the industry is accounting professional body CPA Australia, which turns over $100 million a year in revenue and has more than 100,000 members.

Other big participants include the Institute of Chartered Accountants, which in 2005-06 had revenue of $61 million and 29,000 members, the New South Wales Business Chamber with revenue in 2006 of $40.1 million and 30,000 business members, and the Australian Medical Association with annual revenue of $17 million and 27,000 members in 2005.

KEY STATISTICS 2005

Industry Revenue

$3.648 bn

Revenue Growth (2004 to 2005)

4.70%

Number of Enterprises

5,815

Employment

*21,851.0

BISWorld estimates that industry revenue grew by 1.2% over the five years to $3.8 billion in 2006-07, with a tough year in 2003, when revenue fell 5.9%, balancing out years of 4% plus growth in 2005 and 2006.

Reduced government spending, the demise of GST information gathering related firms and gnawing unemployment were factors that may have contributed to poor growth in the early years of this decade. More recently, however, globalisation, the proliferation of free trade agreements, the use of professional associations for social networking and improved self regulation have fuelled growth.

However, many professional and business associations remain very small. This allows them to adapt easily to political and economic conditions, but it increases their dependence on a limited group of members, communities and donors.

IBISWorld forecasts that the sector will grow at an average annual rate of 2.3% over the next five years to an annual revenue of close to $4.2 billion by 2010-11.

Factors that will drive growth include increasing levels of disposable income and leisure time, solid corporate profits and public sector contributions, industry awareness of the centrality of transparency, globalisation and the targeting of specific racial, gender and national groups.

Membership levels may depend on whether trust is eroded in large non-governmental organisations and “official” political institutions, and whether rise of informal networking technology such as internet chat rooms continues.

IBISWorld believes successful professional and business associations will:

  • Concentrate on their core business.
  • Attract strong member support.
  • Achieve economies of scale.
  • Take advantage of volunteer labour.
  • Maintain an appropriate pricing policy.
  • Successfully achieve organization objectives and educate the wider community on key issues.
  • Control the size and growth of their internal bureaucracy.

Outlook

Revenue ($m)

Growth (%)

2007

3,867.90

1.9

2008

3,960.70

2.4

2009

4,043.90

2.1

2010

4,161.20

2.9

2011

4,231.90

1.7

2012

4,329.30

2.3

 

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