Community Services in Australia Industry Market Research Report Now Updated by IBISWorld

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Although healthcare providers are predominantly run or funded by the government, community services rely on private philanthropy and entrepreneurship, and government funding to generate revenue. The combination of the subdivision's counter-cyclical nature and its close association with health care (which has steadily increasing revenue) means that community service providers were able to ride out the national downturn comfortably. For these reasons, industry research firm IBISWorld has updated its report on the Community Services industry in Australia.

IBISWorld Market Research

IBISWorld Market Research

The industry appears unable to support large companies

Although healthcare providers are predominantly run or funded by the government, community services rely on private philanthropy and entrepreneurship, and government funding to generate revenue. The Community Services subdivision generates only one-quarter of the money dedicated to the Heath and Community Services division, and comprises activities like crisis care, aged care, childcare services, welfare services and fundraising. These industries receive significant funding boosts during hard times, as government spending increases to stimulate a flagging economy and ensure the provision of services to the community. The combination of the subdivision's counter-cyclical nature and its close association with health care (which has steadily increasing revenue) means that community service providers were able to ride out the national downturn comfortably. According to IBISWorld Industry analyst Ee Jen Lee, “Over the five years through 2012-13, subdivision revenue is expected to grow an annualised 7.6% to generate $38.7 billion”. With business confidence expected to remain low over 2012-13, the result is philanthropic activities will grow modestly in 2012-13. Consequently, subdivision revenue is forecast to grow by 6.2% this year.

An ageing population, a surging Child Care Services industry (an important part of this subdivision) and more private money finding its way into the subdivision are all responsible for this resilience, as is a consistent stream of government money. The trends currently boosting growth show little signs of subsiding over the next five years. “Australia's demographic movements means greater demand for childcare and aged care over the next five years”, says Lee. Further, society expectations and varying preferences means that there is greater scope to expand services. For these reasons, IBISWorld forecasts sustained buoyant growth over the next five years through 2017-18.

All industries in the Community Services subdivision exhibit a low level of market share concentration. The Child Care Services industry was one exception for a brief period, as ABC Learning rapidly established dominance. However, the collapse of that company, and revelations that its announced profits were possibly fraudulent, has led to the conclusion that the industry cannot support large companies. Indeed, there are few economies of scale involved in operating numerous locations, while franchise fees appear to be insufficient to make up for operating costs. Much like childcare, aged care exhibits no obvious benefits from operating multiple centres and it is increasingly common for property developers to manage a small number of retirement communities within a specific regional area. Welfare providers and fundraising groups are often small not-for-profit operations, where the majority of funding comes from the Federal Government.

For more information, visit IBISWorld’s Community Services report in Australia industry page.

Follow IBISWorld on Twitter: http://twitter.com/#!/ibisworldau

IBISWorld industry Report Key Topics

Community services providers offer largely ancillary services to health provision, such as homes for the mentally ill or victims of substance abuse. Largely, these services provide greater opportunity for Australians to contribute to the economy or care for those who cannot. For example, childcare providers allow parents to remain in the workforce. The bulk of these services are offered by a combination of government and private money.

Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
International Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Industry Globalisation
Major Companies
Operating Conditions
Capital Intensity
Technology & Systems
Revenue Volatility
Regulation & Policy
Industry Assistance
Key Statistics
Industry Data
Annual Change
Key Ratios

About IBISWorld Inc.
Recognised as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every Australian industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Melbourne, IBISWorld serves a range of business, professional service and government organisations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com.au or call (03) 9655 3886.

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