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Top 10 growth industries - and those that are set to crash
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Top 10 growth industries - and those that are set to crash

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Want to know if your start-up is in a sector set to boom – or bust? Or are you wondering which sector is best for start-ups? …

Want to know if your start-up is in a sector set to boom – or bust? Or are you wondering which sector is best for start-ups?

For start-ups, good ideas will remain good ideas regardless of economic conditions, but it’s advisable to see which way the wind is blowing before launching your business.

Business information analyst IBISWorld has researched 500 industries, forecasting which sectors are expecting exceptional growth, as well as identifying those that are facing troubled times ahead.

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  • 1. Top 10 growth industries – and thosethat are set to crashRobert BryantIBISWorldOliver MilmanStartupSmart.com.auJames ThomsonSmartCompany.com.au Sponsored by:
  • 2. WWW.IBISWORLD.COM.AU Topics 1. The Australian Economy 2. Industries In Perspective 3. New and Emerging Industries 4. Industries to Watch
  • 3. WWW.IBISWORLD.COM.AU 1. The Australian Economy
  • 4. WWW.IBISWORLD.COM.AU Asia Economy Other A-P Other ppp terms 2010 (F) 0.8% Indian S-C 3.3%Malaysia 0.9% Greater ChinaSingapore 1..0%Vietnam 1.1% 42.3%Philipp 1.3%.Thailand 2.2% India 15.1% 38.0% China 16.9% Japan NZ 0.7% H/K 1.3% $US 25.8 trillion Source: CIA/ IBISWorld 02/07/10 (35.8% of world GDP)
  • 5. WWW.IBISWORLD.COM.AU 9 Economic Growth Annual real GDP growth (%) progressed in quarters to September 2010 (and forecast to June 2015) 8 Average long business cycle is 34 quarters (81/2 years) 7 Forecast 6 5 4 3 2 1 0 -1 -2 34 qtrs 34 qtrs 33 qtrs 38 qtrs 33 qtrs 36 qtrs ? -3 1960 1968 1976 1986 1994 2002 2010 2018 1962 1964 1966 1970 1972 1974 1978 1980 1982 1984 1988 1990 1992 1996 1998 2000 2004 2006 2008 2012 2014 2016 2020 Source: IBISWorld: 20/01/11 Years, ended June
  • 6. WWW.IBISWORLD.COM.AU The Market Economy Capital Year to September 2010 Consumption Expenditure Govt. CapEx 27.8% GBEs GG Expenditure 72.2% Company CapEx2 Household Consumption 1 Mainly on behalf of household 2 Incl. inventory change & transfer costs Gross National Expenditure (GNE) $1312 billion (current prices) Source: ABS/IBISWorld 01/12/10
  • 7. WWW.IBISWORLD.COM.AU Australian Index of Consumer Sentiment 2 months progressive to January 2011 Happy 65% of last 40 years 73% of last 20 years Recession Level Source: Westpac-Melbourne Institute (IAESR), IBIS estimates 20/01/11
  • 8. WWW.IBISWORLD.COM.AU Consumption Expenditure Growth 4 qtr moving average to September 2010 9 8 7 6 5 4 3 2 1 0 -1 Recessions do not occur from collapsing consumption expenditure -2 (mainly households), but from capital expenditure which does go -3 severely negative every 8.5 years. -4 -5 -6 1960 1966 1970 1980 1984 1990 1994 2000 2004 2010 2014 2020 1962 1964 1968 1972 1974 1976 1978 1982 1986 1988 1992 1996 1998 2002 2006 2008 2012 2016 2018 Source: ABS: 5206-05 (01/12/10)
  • 9. WWW.IBISWORLD.COM.AU Capital Expenditure Growth 4 qtr moving average to September 2010 18 16 14 12 10 8 6 4 2 0 -2 -4 -6 -8 Recessions occur when -10 GFCE falls more than 8% -12 1960 1966 1968 1974 1976 1982 1988 1990 1996 1998 2004 2006 2012 2018 2020 1962 1964 1970 1972 1978 1980 1984 1986 1992 1994 2000 2002 2008 2010 2014 2016 Source: ABS5206-06 01/12/10 Years, ended June
  • 10. WWW.IBISWORLD.COM.AU 2. Industries In Perspective
  • 11. WWW.IBISWORLD.COM.AU Changing Importance of Australian Industry share of GDP* by industry division 100% Agriculture Mining 90% Manufacturing 80% Utilities 70% Construction Wholesale trade 60% Retail trade 50% Transport &storage Communication 40% Finance &insurance 30% Prop &business 20% Dwelling OShip Govt admin 10% Education 0% Accom, cafes &rest Health &community 1800 1820 1840 1860 1880 2000 2020 2040 2050 1900 1920 1940 1960 1980 Cult &recreation Personal &other Note: *At market prices to 1940, at factor cost thereafter Source: N.G Butlin, ABS & IBISWorld
  • 12. WWW.IBISWORLD.COM.AU Australia’s Industry Mix Shares of GDP in constant F2009 price terms Year to September 2010 Pers. & Other Serv. Hospitality Agriculture Cult & Rec. Serv. Mining (2.0%) 2.2% 9.5% Utilities 2.0% 7.1% Construction O’Ship Dwells. 7.4% 11.0% Prop. & Business Services Finance & Ins. 3.0% Sectors Primary Secondary Prof., Scient. & Tech Services 6.1% Tertiary Rental, Hiring & Real Estate 2.6% Communications & Media Quaternary Admin. & Support Services 2.3% Quinary GDP $1292 billion (constant F2009) ABS 5206-26 IBISWorld
  • 13. WWW.IBISWORLD.COM.AU Importance of Australian Industries F1960 F2010 100% 2.1% Agriculture Agriculture 11.0% 7.8% 90% Mining Manufacturing 8.6% 80% Utilities 7.3% Construction 28.9% 70% 4.5% 4.1% Wholesale trade Retail trade 4.8% 60% Transport &storage 9.9% Communication 50% 7.7% Finance &insurance 10.8% Prop &business 40% 11.6% Dwelling OShip 5.9% Govt admin 30% 3.8% 7.8% Ind taxes et al 4.9% Education 20% 7.0% 6.8% Accom, cafes &rest 4.1% Health &community 10% 5.8% Cult &recreation 0% Personal & Other $0.22 trillion (2010 prices) $1.28 trillion Shares of GDP by Industry Division, current prices Source: ABS/IBISWorld
  • 14. WWW.IBISWORLD.COM.AU 3. New and Emerging Industries
  • 15. WWW.IBISWORLD.COM.AU Australia’s Economic Growth GDP @ Constant F2008 Prices 1788-2010 (F) 1800 Hunting Agrarian Industrial Infotronics 1700 1600 Age Age Age Age 1500 Service 1400 industries 1300 Hunting, Agriculture, An Industrial Age is when and IC&T 1200 trapping, Mining, Manufacturing, 1100 fishing, Banking, Construction GDP $ billion 1000 crafts, Commerce and Utilities (electricity, 900 religion gas 800 & water) dominate the 700 economy, that is 30-50%+ 600 of GDP 500 400 300 200 100 0 1790 1860 1930 1950 2000 2020 1780 1800 1810 1820 1830 1840 1850 1870 1880 1890 1900 1910 1920 1940 1960 1970 1980 1990 2010 2030 2040 2050 2060 IBISWorld 17/02/11 Year, ended June
  • 16. WWW.IBISWORLD.COM.AU Fastest Growing Industry Themes New Age 1965-2040s  IC&T - the New Age all-pervasive utility.  Business Services - outsourcing non-core functions.  Financial Services - outsourcing of transactions/investment.  Property Services - outsourcing property ownership/services.  Knowledge Industries - databases & multi-media services.  Health - outsourcing home doctoring.  Education - outsourcing pre-school, plus universities.  Personal & Household Services - outsourcing chores.  Hospitality & Tourism - outsourcing the kitchen and travel  Recreation & Cultural Services - outsourcing leisure.  Mining - energy minerals (oil, gas, coal, uranium)  Biotechnology & Nanotechnology - New Age technologies  Environmental Services - testing, assessment, amelioration
  • 17. WWW.IBISWORLD.COM.AU Outsourcing Creates Most Industries  We outsourced the growing of things to create the agriculture industry, aided by new technologies  We outsourced the making and building of things to create the industrial age industries of manufacturing and construction, aided by new technologies and utilities.  We are outsourcing services (household services and business functions) to create the current infotronics age from 1965-2040s, aided by new systems & technologies and a new utility sector. These created $ 1 billion in extra revenue pa by 2010
  • 18. WWW.IBISWORLD.COM.AU Who Outsources? Households (80-90% of all new jobs and GDP)  new industries carry out household activities in a quarter of the time and a third of the (real) cost of the DIY household and improve both our standard of living and our quality of life. Businesses (no net new jobs )  businesses are now outsourcing non-core activities and franchising, transferring jobs from one business or industry to another business or industry to be done more efficiently with huge productivity gains. Other Nations (10-20% of all new jobs and GDP)  our exports are the result of other nations outsourcing some of their needs of goods and services to us.
  • 19. WWW.IBISWORLD.COM.AU New Age Industries 1965 – 2040s+Household Outsourcing Business Outsourcing  Hospitality (meals, accommodation)  Trucking  Entertainment (clubs, casinos)  Facilities management  Household services (everything!)  Business services (A/C. legal)  Personal services (beauty, fitness)  Knowledge services (data, consulting)  Health (everything!)  Cleaning.  Tourism (transport, agencies)  Catering  Education (pre-school, tertiary) services)  HR services (recruitment, staffing).  Child minding (pre-school, nanny services)  Security  Finances (advice, management)  Call Centres/CRM services  Other services (inc. unmentionables)  Operations (via franchising)Overseas Outsourcing (To Us) New Enabling Utilities (& technologies)  Mining (energy minerals)  IC&T  Tourism (inbound)  Nanotechnology  Education (mainly tertiary)  Biotechnology  Health  Just-in-time systems  Aquaculture (& crustaceans)  Self-service systems  Manufacturing (smelted ores)  IP (royalty arrangements)
  • 20. WWW.IBISWORLD.COM.AU Industry Lifecycles Australia has 500 classes of industry in its economy ranging from Grains Growing to Waste Disposal Services. All such classes of industry have long lifecycles of around 40-60 years, which repeat to form new lifecycles. IBISWorld charts such industries by their contribution to the GDP (value added share)
  • 21. WWW.IBISWORLD.COM.AU Typical Life Cycle in an Industry (measured as an Industry’s value added share of GDP)
  • 22. WWW.IBISWORLD.COM.AU The 5-way Changes in A New Lifecycle Each new lifecycle brings gradual changes to an industry. It takes until the top of the new cycle for 60% of the industry’s revenue to reflect these changes, and the end of the lifecycle to reflect 80% of the new changes. So it is a slow process. The 5-way changes are: Products Customers Geographic location Systems & Technology Ownership (industry enterprises)
  • 23. WWW.IBISWORLD.COM.AU Wine Industry Lifecycle Value added as % of GDP 1890-2007 0.300 0.280 0.260 2nd Era 3rd Era 4th Era 5th 0.240 Table Fortified Table Era 0.220 ? Wines Wines Wines 0.200 0.180 0.160 0.140 0.120 0.100 0.080 0.060 0.040 0.020 0.000 1870 1890 1920 1950 1980 2000 2030 1860 1880 1900 1910 1930 1940 1960 1970 1990 2010 2020 Source: IBISWorld 18/01/10
  • 24. WWW.IBISWORLD.COM.AU 4. Industries to Watch in 2011 and beyond
  • 25. WWW.IBISWORLD.COM.AU Top Growth Industries Annualised growth over 5 yrs to 2013 measured as a percentage of industry revenue Video Games 14.8 Online Education 14.1 Organic Farming 13.1 Renewable Energy 9.3 House Construction 6.2 Debt Collection 6.0 Takeaway Food Retailing 5.8 Physiotherapy Services 5.4 Motor Cycle Dealing 5.4 Waste Disposal Services 5.3 Source: IBISWorld 28/02/11
  • 26. WWW.IBISWORLD.COM.AU Signs of Flight Industries benefiting from;  Greater disposable household income  Technology enabled growth  Demographic and behavioural change
  • 27. WWW.IBISWORLD.COM.AU Organic Farming  Premium product – greater disposable income  Social values and behaviour  Lifecycle stage and related characteristics  Volatile industry – climatic impact Growth 13.1%
  • 28. WWW.IBISWORLD.COM.AU Online Education  Technology enabled growth  ‘Lifelong learning’ – appeal to a broad demographic  Increasing profitability Growth 14.1%
  • 29. WWW.IBISWORLD.COM.AU Video Gaming • Technological advancement • Online social behaviours • Gamers of all ages Growth 14.8%
  • 30. WWW.IBISWORLD.COM.AU Motor Cycle Dealing  Dramatic increase in registrations 2005-10  Rising fuel prices  Rising dollar value – competitive pricing  Increased disposable income – the grey haired biker Growth 5.4%
  • 31. WWW.IBISWORLD.COM.AU Takeaway Food  Evolving product – health, convenience of ordering  Stable share of household expenditure  Benefit of the substitution effect in tough times Growth 5.8%
  • 32. WWW.IBISWORLD.COM.AU Renewable Energy  Government support  Significant technology development  Increasing participation and profit  Downstream opportunities Growth 9.3%
  • 33. WWW.IBISWORLD.COM.AU Declining Industries Annualised growth over 5 yrs to 2013 measured as a percentage of industry revenue Revenue Industry 2011 Decline % $millions Computer Equipment Manufacturing 753 -11.6% Telecommunication Resellers 2,610 -5.5% Men’s & Boy’s Wear Manufacturing 260 -4.2% Book & Magazine Wholesaling 1,504 -3.3% Video Hire Outlets 1,039 -3.2%
  • 34. WWW.IBISWORLD.COM.AU Gravitational Forces Industries feeling influence of;  Overseas competition  Lifecycle stage  Technology threats  Government influence
  • 35. WWW.IBISWORLD.COM.AU Summary…  International (regional) demand and opportunity  Private Capital Expenditure driving growth  Business Environment Factors  Industry Lifecycles
  • 36. Thank you Sponsored by: