Fast growth industries: which are hot, which are duds
Friday, February 1, 2008/
Looking for new clients or places to sink some spare cash? You can’t go past targeting companies in the uranium industry. Uranium mining is predicted to be the fastest growing industry in 2008 with an estimated percentage growth of nearly 30%, according to business information analyst IBISWorld.
Next on the hottest industries list is internet service providers (17%), copper ore mining (15.9%), iron ore mining (13.2%) and bottled water manufacturing (13.1%).
And what you want to avoid? Those industries in the top five poor performing list for 2008, and for the five years beyond, are surveying, horse and dog racing, rubber tyre manufacturing, pig farming and sugar cane growing.
Australia’s mining industries are in for another bumper year, according to IBISWorld general manager Robert Bryant.
Five out of the 10 top performers in 2008 are in mining or are mining related. Ongoing demand from China and rising demand from India is set to provide a solid base for the resources sector in 2008, despite the jitters in the US economy, he predicts.
Last year revenue from the uranium industry grew by 20% to $637.5 million. This year it’s tipped to grow by 29.1% to take revenue to $823.2 million. Double digit growth is expected to continue until 2009.
Bryant predicts that while spot uranium prices will fall, contract prices will trend upwards and production is tipped to expand. By 2013 Australia’s uranium output will amount to 11,000 tonnes, but there is not expected to be any significant new mines coming on stream over the next five years because of the difficulty securing funding and substantial political hurdles associated with developing new operations.
The internet service providers industry is still hot, Bryant says. It will grow by 17% to $5.9 billion before falling back to single digit growth in the 2008/09 financial year, easily outperforming the broader telecommunications services sector. While broadband prices will continue to fall, the industry will still benefit because of broadband’s higher price points relative to dial-up.
Bryant says that mobile broadband services will benefit from the fact that laptops now outsell desktops in Australia, and with high speed broadband access available in mobile phones by next year, ISPs will not only be competing against one another but also with mobile telecommunciations carriers pursuing growth via data services using Super 3G or 4G technology.
Meanwhile the public’s thirst for bottle water continues to grow, with revenue expected to jump from 9.1% to $460 million. Warmer weather, rising health awareness and strong disposable income are having a positive impact, he says.
New companies entering the market will provide some price competition.
For more IBISWorld reports, see our Industry Trends section.