The Five Aussie Industries expected to Sink in 2016

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As Australian companies usher in the New Year, some industries can expect a far bleaker outlook than others and a challenging 12 months ahead.

Falls in global oil prices have push down revenue for petroleum refining and petroleum fuel manufacturing, while revenue is also set to fall for diamond and gemstone mining, printing and nightclubs, according to a recent IBISWorld report.

Also read: Britain ends mining boom, is Australia next?

Five industries to fall in 2015

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Source: IBISWorld

Petroleum refining and petroleum fuel manufacturing in Australia

The petroleum refining and petroleum fuel manufacturing industry’s revenue is falling rapidly, with a decline of 16.7 per cent expected in 2015-16 alone. Industry revenue is estimated to decline at a compound annual rate of 7.7 per cent over the five years through 2015-16, to reach $19.1 billion.

Also read: Seven forgotten Aussie mining towns

According to IBISWorld senior industry analyst Spencer Little the industry is “struggling primarily due to intense and rising competition from new South-East Asian refineries”.

“These operations typically have higher output and lower costs than Australian refineries [and] these advanced refineries are also able to meet Australian fuel standards and this trend has made the Australian industry more vulnerable to import competition.”

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Contract mining services in Australia

Demand for industry services is typically driven by the relative cost savings and output advantages that mining companies derive from outsourcing these processes, compared with keeping production in-house.

Industry revenue has fluctuated significantly over the past five years due to shifting operating conditions in the Mining division.

“The industry is highly dependent on trends in mining activity, particularly black coal and iron ore mining activity, as these are Australia’s largest resources in terms of both volume and value,” Little said.

Also read: Oil prices crash, why haven’t Aussie petrol prices followed?

As commodity prices have fallen, many mining firms have ceased expansion and exploration projects, and instead shifted their focus to production.

This trend is set to continue in 2015-16, contributing to a projected 6.3 per cent decline in revenue to reach $11.2 billion. This follows on from a sharp 14.0 per cent decline in revenue in 2014-15.

Diamond and gemstone mining in Australia

Revenue in the diamond and gemstone mining industry is forecast to fall at a compound annual rate of 4.0 per cent over the five years through 2015-16, to reach $380.1 million.

Also read: Turnbull to spruik investment to giants

The industry’s performance has been volatile over the past five years, due to fluctuating production volumes and prices.

A significant drop in revenue in 2013-14, and another expected fall in revenue in 2015-16 are expected to underpin the industry’s poor performance over the period.

“Industry operators also face strong competition from imports, which account for a large proportion of total domestic demand,” Little said.

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The exit of Kimberley Diamonds, previously a major industry player, is expected to negatively affect the industry’s performance in 2015-16.

In July 2015, Kimberley Diamonds announced that it had ceased its local diamond mining operations at its Ellendale site and entered into voluntary administration.

This exit is expected to cause a major dip in diamond production volumes and contribute to a 13.3 per cent decline in industry revenue in 2015-16.

Also read: 10 worst Aussie jobs for the future

Printing in Australia

Over the past five years, the rising prevalence of online platforms has negatively affected demand for printed advertising materials such as catalogues, brochures, leaflets, and booklets.

Advertising materials account for the largest share of industry revenue, at more than 60 per cent, but as consumers have increasingly shifted online to access content, advertising companies have also sought to advertise products and services online.

As a result, industry revenue is projected to decline at a compound annual rate of 3.8 per cent over the five years through 2015-16, to reach $6.9 billion.

Also read: 10 best Aussie jobs for the future

Demand for printed advertising materials such as catalogues, brochures, leaflets, booklets and posters has declined as spending on advertising has been redirected to the digital space.

These trends have led to a sharp decline in demand for industry services, with revenue expected to fall by 3.8 per cent in 2015-16.

Nightclubs in Australia

According to IBISWorld analysts, the nightclubs industry has had a tough couple of years.

Industry revenue is expected to decline by 2.9 per cent in 2015-16, following sluggish growth of 0.3 per cent in 2014-15.

This is in contrast to the strong industry growth seen in the years 2010-11 through 2013-14.

Also read: ‘Aussies not working hard enough to grow economy’

Weaker growth has largely been due to increased industry regulation and decreasing alcohol consumption among younger demographics.

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Posted on January 31, 2016, in ConspiracyOz Posts. Bookmark the permalink. 1 Comment.

  1. Thx again to the omnipresent Winston Smith for this Article – Mick Raven

    Like

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