While 2009 proved a tough year, characterised by rising unemployment and economic doom and gloom, it seems the New Year bears good tidings for Australian business, with GDP growth of 2.2% projected for 2010.
The information analysts IBISWorld have compiled a list revealing the top sectors set to both sink and swim in the year to come – and it features more than a few surprises.
The Top 10
Sugar manufacturing
While the past five years have seen the sugar manufacturing industry buffeted by the highs and lows of global demand, supply trends and world prices, IBISWorld is projecting 2010 will see Australia’s sugar manufacturing industry positioned as the biggest grower for the 2010 calendar year – raking in $3.11 billion, an increase of 15.9% from 2009 revenue of $2.68 billion.
However, it seems the good tidings do not extend to employment, with IBISWorld forecasting jobs to fall by 1.5%.
Organic farming
Demand for organic products in Australia and around the world has risen in recent years as consumers increasingly consider the health benefits and environmental impact of their food choices. The industry is projected to total $425 million in 2010, representing growth of 14.8% from 2009, while employment is expected to grow by 2.6%.
While on average organic goods remain more expensive than non-organic produce, higher disposable incomes coupled with increasing awareness of environmental sustainability and an increase in the range of organic produce available, will see continued growth in this industry.
Oil & gas production
Although IBISWorld projects oil production will decline in 2010, this will be more than offset by a rise in natural gas production, seeing the sector post 13.8% growth in 2010 to $37.3 billion – generating a 3.5% increase in employment.
In the coming year, Australia’s oil and gas industry will benefit from higher international prices, increased production volumes of natural gas from existing fields and the development of new fields.
Institutional building construction
Centred on the construction of buildings where Australians learn, work, are healed, socialise, exercise, pray and seek justice, the Institutional Building Construction industry is expected to grow by 12% in 2010 to $9.4 billion, supported by increased government spending – especially on educational structures.
Activity in the educational building market has surged by about 40% in the past two years, and will be bolstered in 2010 by projects arising from the Australian Government’s Economic Stimulus Plan – resulting in a 6.5% boom in jobs.
Insulation services
IBISWorld expects the insulation services industry will continue to experience growth in the first half of 2010 as households take advantage of Government subsidies such as the Energy Efficient Homes program provided as part of economic stimulus package. However, following substantial growth of 11.8% to $1.13 billion, and an 8.3% increase in jobs in 2010, demand is expected to drop off as subsidies expire, resulting in zero growth in 2011.
Health insurance
Despite a rise in Medicare levy surcharge thresholds, IBISWorld predicts 2010 will see an increasing number of Australians take out private heath cover. This, combined with a rebound in investment income for insurers, will see the industry post growth of 10.3% to $14.6 billion 2010, while employment is expected to experience slight growth at 0.6%.
There are several factors leading more Australian’s to take out private health insurance, including rising incomes, tax advantages, and an ageing population.
Alternative health therapies
A growing acceptance of alternative therapies and more holistic approaches to health has seen alternative health therapies increase in popularity in recent years, with IBISWorld projecting the sector will experience growth of 5.1% in 2010 to total $3.36 billion.
Growing demand is also expected to see an increase in jobs, with IBISWorld predicting employment to grow by 4.2% in 2010.
Online shopping
As access to technology improves, and our overall skill in using it grows, IBISWorld is forecasting time-poor bargain hunters will continue to flock to e-tailers to meet their shopping needs. Improvements in online store usability, efficiency, reliability and security are expected to drive growth of 4.7% in 2010, to reach $20 billion – resulting in a 2.9% growth in employment.
Within Australia, online sales currently represent just 5.5% of all retail sales, well below levels in the United States and Britain, leaving room for significant growth over the next few years. Current lower levels are partially due to the fact that Australian retailers have been slow to offer online sales.
Weight loss services
IBISWorld projects the weight loss services sector will grow by 4.6% in 2010 to be worth $768 million, generating a 2.7% increase in employment. The sector is expected to continue to grow in 2011, as rising obesity rates and growing public awareness of subsequent health issues lead more Australians to invest in weight loss.
The increasing availability of weight loss drugs and supplements, as well as growing acceptance of surgery as a treatment – such as lap-bands – will see more Australians invest in weight loss treatments in the coming years.
Baby products
Over the last five years there has been strong growth in high-end baby products, as first-time parents in their late-30s and 40s buy up big for their newborns – seeing the sector forecast to grow by 3.3% to $4.17 billion in 2010, generating a 2.7% increase in employment.
Key areas of growth include premium kids clothing, with celebrated fashion designers such as Collette Dinnigan and Fiona Scanlan launching children’s lines, as well as the continued expansion of ‘mini me’ branding .
IBISWorld’s Top 10 growth industries for 2010
The Bottom 5
Image processing & printing services
The digital revolution and the advent of digital cameras, home photo printing equipment, digital photo frames, and electronic storage of images has led to the image processing and printing services sector suffering significant losses, with IBISWorld forecasting revenue to fall by 5.7% in 2010 to $548 million. Corresponding to the fall in revenue, IBISWorld expects the number of jobs to fall by 3.7%.
Multi-unit apartment & townhouse construction
Despite a shift in lifestyle and residential preferences toward higher density housing, IBISWorld expects multi-unit apartment and townhouse construction will contract sharply in the coming year, falling by 5.2% in 2010 to $6.6 billion – seeing employment drop 3.9%.
Reduced access to credit for developers, rising interest rates and a reduction in the first home buyers grant will be the main contributors to the downturn.
Wired telecommunications carriers
In 2010, IBISWorld expects the number of consumers switching from wired to unwired services to increase, resulting in a fall of 4.6% in 2010 to $12 billion for wired telecommunications carriers.
Consumers are increasingly opting for un-wired options as they allow cost saving benefits such as removing line rental expenses, resulting in a decrease in revenue and drop of 3.1% in employment.
Video hire outlets
Increasing electronic distribution of video content and a greater volume of both pay and free-to-air television programming has resulted in a long-term downward trend for video hire outlets. In 2010, IBISWorld projects industry revenue will decrease by 3.7% to $524 million, and the number of jobs in the sector to fall by 1.5%.
Travel agency services
IBISWorld predicts another poor year for travel agents following a further decline in international tourism and the rapid growth in online booking sites. Revenue is tipped to contract by 1.9% in 2010 to $2.71 billion, while employment will fall by 1.3%.
IBISWorld’s Bottom 5 growth industries for 2010
Robert Bryant is the general manager of business information firm IBISWorld.
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