As we ease into the new financial year, the business information analysts (I like to call them soothsayers) over at IBISWorld reveal what their surveys, analysis and crystal balls say about the industries set to soar and sink in the financial year 2013-14. For now, let’s focus on the ones “destined for doom”.
Aand so, without further ado, the nominees are…
Video and DVD Hire Outlets
The video and DVD hire industry is facing potential annihilation by online rental services, piracy and services, such as iTunes, that provide cheaper and more convenient access to movies. It’s a classic case of new technology squeezing out the old. To compete on price, video and DVD hire outlets have had to significantly slash margins, barely making any profit anymore.
Automotive Electrical Component Manufacturing
An overall economic slowdown and poor demand for new vehicles have affected sales for these guys, as has the consumer shift towards smaller, more fuel-efficient imported cars. Overall, the Australian supply chain is uncompetitive compared with overseas manufacturers. While the government is making efforts to support the local manufacturing sector, its future performance is on shaky ground and the exit of Ford from local manufacturing obviously does not help at all.
Heavy Industry and Other Non-Building Construction
In 2013-14, IBISWorld expects this industry to decline by 5.4% this year. Why? Less investment in new mining projects means lower demand for new rail, port and sorting facilities. As investment in new mining infrastructure falls, this industry lean more on traditional sources such as telecommunications, so revenue will fall before the industry finds its feet again.
Readers seem to be shifting towards online book stores, leaving domestic book publishers with stacks of unsold books touching the roof. Many consumers prefer to buy from foreign retailers that have exceptional bargaining power and offer fast postage and heavily discounted prices. The collapse of major book store owner REDGroup might be a sign of what’s on the way.
Mineral exploration appears to be the “most doomed of the doomed” with the lowest growth prospects in 2013-14. However, the industry’s decline will be largely cyclical as a number of mining investments made in the past five years reach completion.
Well there you have it, now only time will tell if these will live to prove the soothsayers wrong. So what about the other side of the coin? Which industries are “destined for greatness”?