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2010 Australian business boom

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by Peter Switzer

For those worried about the doomsday merchants and their prophecies of double dip recessions and share price bedlam, it’s worth noting that the formidable IBISWorld predicts 2010 will be a boom year for Australian business.

The experts there go further and predict that the next five years will bring significant economic growth.

“The fact that December 2009 saw the number of jobless people fall by 13,300 is a sure sign that the Australian economy is on the up, and indicates positive hiring intentions for 2010 and beyond,” says Robert Bryant, the GM of IBISWorld.

And while there will be a general improvement for the jobs market in Australia, what follows are the areas pinpointed as being the best for jobseekers by IBISWorld.

The favoured industries are also a great guide for those setting up small businesses and thinking about investing in sectors with a high potential for growth.

1. Opting for organic

In the next five years, IBISWorld projects increasing health consciousness and environmental awareness will drive demand for organic foods, seeing revenue grow at an average 13.4 per cent per year to reach around $760 million in 2014. As the industry expands, employment is forecast to strengthen from 6.2 per cent in 2012-13 to 11.2 per cent in 2013-14.

“Growth will mainly be driven by increases in production, and an increase in consumer demand,” Bryant says. “Not only does organic farming offer higher returns for farmers, but recent studies suggest it is more resilient and adaptable to changing conditions wrought by climate change – encouraging some farmers to switch from conventional to organic farming.”

In terms of job prospects, Bryant notes opportunities would relate to increased production, creating demand for farmers, farm-hands, skilled and unskilled labourers, and itinerant workers such as pickers.

“While many of the jobs created will fall into the category of unskilled labour, there will also be opportunities created for ecologists, biodynamic farming specialists, and researchers,” Bryant adds.

2. Investing in green

As the green message begins to translate into government policy, IBISWorld anticipates the introduction of an emissions trading scheme or similar framework will create new revenue opportunities for investment banking and security brokerage, with strong employment and wage growth projected for 2012 to 2014.

Bryant says opportunities are likely to arise in areas of risk management, planning and advisory, and the trading of products linked to carbon credits.

3. Mining money - an iron grip on a pretty nickel

Looking to 2014, IBISWorld expects Australia’s mining sector will remain a strong employer, with nickel and iron ore mining leading the charge in employment growth.

While the global financial crisis (GFC) saw production in nickel ore and iron ore mining fall, IBISWorld expects activity in the sector to rebound in 2010 and beyond, resulting in increasing demand for a range of jobs including chemical and material engineers, geologists, surveyors, cartographers, electricians, welders, safety inspectors; truck drivers and mining labourers.

4. Everything online

Over the five years to 2014-15, IBISWorld expects increased investment in online information services and the development of new products and applications to see employment increase at an average annual rate of 7.1 per cent. Wages are also expected to increase at a rate of 9.9 per cent per year, driven by growing demand and the expansion of mid-sized firms.

However, Bryant notes employment and wage growth is expected to be somewhat mitigated by improving technology, which will increasingly make many positions redundant.

With employment focusing on technology application and development, Bryant flags information technology courses – which accounted for 2.9 per cent of all undergraduate university enrolments in 2009 – as being the most relevant to gaining employment.

5. Bringing up baby

An industry that has suffered staff shortages in the past, IBISWorld predicts the coming years will see demand for childcare services remain strong, resulting in 6.1 per cent employment growth in 2013-14. IBISWorld expects the collapse of ABC Learning that has occurred in the past year, will see a re-emergence of community-run centres, and cause operators to re-evaluate their practices.

Bryant says increased industry regulation, and the expansion of high quality childcare services is expected to both push wages up, and encourage employment growth for staff with varying qualification levels, including childcare managers, early-education teachers, and carers.

Bryant identifies a range of further education opportunities, including childcare traineeships and TAFE courses, and early education teaching at university as options for anyone interested in obtaining employment in the sector.

6. Pet therapy

According to IBISWorld, recent years have seen Australians invest more money on pampering their pets, providing a boost for pet-related industries such as veterinary services – resulting in a growing demand for vets, vet nurses, and animal focused alternative health practitioners.

“In response to increased demand, we are seeing more vets branch out, offering services such as chiropractics, ophthalmology, dentistry and dermatology – generating additional revenue and creating more employment opportunities,” Bryant says.

However, while employment opportunities are set to boom, Bryant explained only 0.3 per cent of students received a place in veterinary science degrees in 2009, meaning the sector may be faced with a skills shortage in the coming years.

7. Show them the money

As Australia’s baby boomers approach retirement age, and as disposable income increases, IBISWorld projects demand for financial planning and investment advice to increase, resulting in employment growth of 4.1 per cent in 2013-14.

“Prior to 2009-10, growth in demand for finance and investment advice services outpaced the number of qualified staff, leading to a skills shortage. As the economy recovers, demand is expected to pick up again, meaning the sector will need additional professionals to service growing demand,” Bryant says.

“Industry growth is currently constrained by the total number of advisors and the revenue and profits they generate, meaning growth in employment is imperative for the sector to expand.”

8. Counting on growth

One of the sectors hardest hit by the 2008 to 2009 downturn, IBISWorld expects 2009-10 will prove another tough year for accounting services with industry revenue falling by 1.1 per cent to $14 billion, resulting in a decrease of 1.6 per cent in employment.

However, Bryant says that the accounting services industry is well positioned to take advantage of economic recovery as new regulations and reporting requirements come into effect in response to the global financial crisis.

“Increased compliance requirements and other recent regulatory changes such as the Anti-Money Laundering and Counter-Terrorism Act of 2006, or any future climate change legislation will help to fuel demand for accounting services over the next five years.”

9. Essential health

IBISWorld expects Australia’s ageing population, and an increase in the prevalence of chronic disease such as diabetes will see demand for jobs in the hospital and health sector continue – with employment forecast to grow by a steady 3.5 per cent each year from 2010 to 2014.

“Increasing demand for health services will see growth across a range of occupations, including surgeons, anaesthetists, occupational therapists, medical technicians, radiologists, paediatricians, ambulance officers, nurses, kitchen hands, laundry workers, cleaners and cooks,” Bryant says.

10. Booming biotechnology

While the GFC saw a slow-down in investment in research and development, IBISWorld expects Australia’s biotechnology industry will bounce back in the coming years, creating additional jobs.

“Australia’s biotechnology sector largely focuses on areas relating to human health and agriculture – both of which are expected to continue to grow over the next five years, as health and the environment remain high on the agenda,” Bryant says.

However, Bryant notes that many companies looking to expand have found it difficult to attract qualified employees – such as clinical research associates, research assistants, science technicians, and research and development managers – somewhat mitigating growth.

For the complete picture IBISWorld identified 11 areas where there will be challenges and limited jobs growth. These included:

1. Image processing and printing

2. Internet service providers

3. Computer and related equipment manufacturing

4. Motor vehicle manufacturing

5. Recorded media manufacturing and publishing

6. Satellite television and radio relay operations

7. Tobacco product wholesaling

8. Food processing machinery manufacturing

9. Leather goods retailing

10. Automotive parts and accessories manufacturing

11. Wired telecommunications carriers.

I hope this sneak preview from IBISWorld’s crystal ball will help you make great business, investment and job training decisions.

For advice you can trust, contact Switzer Financial Services.

Important information:This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. For this reason, any individual should, before acting, consider the appropriateness of the information, having regard to the individual’s objectives, financial situation and needs and, if necessary, seek appropriate professional advice.

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Published on: Friday, January 15, 2010