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Five industries tipped to succeed in 2011 (and those likely to fall). Is your industry among them?

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With the new financial year upon us, business information research and analysis group IBISWorld has compiled its annual list of Australian industries set to fly and fall in the next 12 months.

According to the list, organic farming will be the biggest winner in 2010-2011, as Australians consider the health benefits and environmental impacts of their food choices, while insulation services will be the biggest loser following the federal government’s scrapping of its Home Insulation Program. Also, IBISWorld forecasts wildly contrasting fortunes for major industries in Australia’s communications sector.

THE TOP FIVE
1. Organic farming
2. Online information services
3. Insurance brokerage
4. Mobile telecommunications carriers
5. Alternative health therapies

THE BOTTOM FIVE
1. Insulation services
2. Wired telecommunications carriers
3. Paper manufacturing
4. Video hire outlets
5. Grape growing

Whereas most of the world’s developed nations remain bogged down by the fallout from the ongoing global financial crisis, Australia’s outlook for the new financial year is relatively positive says IBISWorld, with it forecasting Australia’s economic growth to reach 3.7% in 2010-2011.

1. Organic farming

Revenue growth: +15.1%; total revenue: $0.45 billion; employment growth: +2.0% IBISWorld forecasts that ever-increasing health concerns, greater awareness of environmental sustainability, higher disposable incomes and the availability of a wider range of organic produce will support phenomenal growth in Australia’s organic farming industry, which currently accounts for less than 1% of the total value of grains, meat, horticulture and dairy production in the country.

“Big business is jumping aboard the organic farming bandwagon,” said IBISWorld General Manager (Australia) Mr Robert Bryant. “For example, recently international heavyweights McDonald’s and Unilever made bold moves to become more environmentally friendly and ethically sound by sourcing coffee and tea respectively from plantations accredited by American environmental organisation Rainforest Alliance while Coles supermarkets have their own private-label organic brand.”

2. Online information services

Revenue growth: +8.7%; total revenue: $1.56 billion; employment growth: +7.3% IBISWorld forecasts that an increased use of mobile devices such as smartphones and Apple’s iPad will result in a big increase in Australians accessing of online information on the go. Moreover, in the wake of the global financial crisis, the demand of Australian businesses for financial information – in order to manage risk, make better decisions and adapt to shifting economic conditions – will expand.

“Consumers are getting an increasing proportion of their news and information online, migrating from traditional sources such as print media and television,” Mr Bryant said. “Advertisers are following consumers, buying advertising space on the websites of information providers such as Fairfax and News Limited, as well as buying search terms from search providers such as Google and Yahoo.”

3. Insurance brokerage

Revenue growth: +7.2%; total revenue: $11.20 billion; employment growth: +2.4% IBISWorld forecasts rapid growth in premium pricing as Australian insurance carriers strive to recoup underwriting capacity lost on recent investment activities. This will result in substantial revenue growth for brokerage firms since brokers earn commissions on the size of the premiums written.

“As brokers distinguish themselves from direct insurance sellers through a greater emphasis on advisory services and financial management, they will increase profitability and allow for both employment and wage growth,” Mr Bryant said. “Employment will grow at 2.4% and wages at 3.1%.”

4. Mobile telecommunications carriers

Revenue growth: +6.9%; total revenue: $19.60 billion; employment growth: +0.8% IBISWorld forecasts that Australia’s mobile telecommunications carriers will benefit greatly thanks to the growing demand among Australians for mobile internet data subscriptions and their continuing migration from fixed phone services which enable them to avoid associated line rental fees.

“The smartphone explosion is seeing revenue from mobile services other than voice, SMS and MMS rise rapidly,” Mr Bryant said. “Millions of people cannot get enough of being able to browse the Internet and watch television on their hand-held devices and they love their apps as well.”

5. Alternative health therapies

Revenue growth: +6.5%; total revenue: $3.46 billion; employment growth: +4.3% IBISWorld forecasts that an increasing acceptance of alternative therapies and more holistic approaches to health among Australians will see its associated industry continue to expand. “Growing acceptance of alternative therapies coupled with increasing coverage of such treatments by private health insurance providers is the key to this industry’s continuing success,” Mr Bryant said.

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