The Defence industry in Australia is dependent on Federal Government funding
Melbourne, Australia (PRWEB) May 17, 2012
Contributions towards the Defence industry in Australia are expected to rise at a rate of 1.4% per annum over the five years through 2011-12. The rise in Federal Government funding, which makes up the majority of total revenue, represents the government's commitment toward ensuring the safety and security of Australia and its neighbouring nations. In 2011-12, the industry will generate revenue of $23.9 billion, representing a fall of 3.8% from the previous year. According to IBISWorld industry analyst David Stephen, “relatively large revenue fluctuations can occur from year to year, but volatility tends to smooth out over the long term”.
The major challenge for the Defence industry over the five years through 2016-17 will be in assessing the appropriate level and capability of defence equipment in a volatile global, political and security environment. Despite continued defence spending, there is uncertainty over agreements with Australian industries that supply products and services to defence, due to cost controls and the aim to maintain compatible equipment with the United States. Stephen adds, “this could mean that the Department of Defence and its Defence Material Organisation may bypass some local suppliers in favour of off-the-shelf systems that are cheaper, proven and extensively customised”.
The Defence industry in Australia is exclusively controlled and managed by the Federal Government, and therefore is considered to have an extremely high market share concentration level. An alternative way to analyse concentration is to assess the share of the supply chain that is controlled by the industry. The increasing complexity of technology used in defence has resulted in much of this work now being outsourced to private firms, particularly specialist electronics, communications and engineering companies. This trend is expected to continue over the next five years, meaning that the industry's level of control over the supply goods and services will further decline.
For more information, visit IBISWorld’s Defence industry report in Australia industry page.
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IBISWorld industry Report Key Topics
The Defence industry is part of Australia's public sector. The industry largely consists of the Department of Defence, within which sits various groups involved in defence and national security. This includes the army, navy, air force, intelligence organisations and administrative and support functions thereof. The industry excludes providers of services to defence and educational institutions for the defence force.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Technology & Systems
Regulation & Policy
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