The industry should return to stable growth in the next five years
Melbourne, Australia (PRWEB) September 22, 2012
The Scaffolding Services industry has faced volatile conditions over the past five years. Industry revenue has increased by an annualised 0.6% over the five years through 2012-13 to be worth $793.4 million. According to IBISWorld Industry analyst Jeremy Edwards, “Economic uncertainty caused by the global financial crisis severely affected Australian construction markets, the effects of which were fully felt by the industry”. Due to scaffolding services being heavily reliant on commercial and residential construction, falling private capital expenditure significantly hurt industry revenue. Economic stimulus packages provided by the Federal Government and construction growth in the industrial sector helped offset the effect. However, government and industrial construction makes up a smaller market for industry operators. Low growth in revenue resulted in a slight decrease in the number of enterprises operating within the industry.
The industry is expected to return to positive stable levels of growth in the next five years. Construction growth is forecast to be stronger as the industry benefits from a revitalised private sector post-financial crisis. Scaffolding services are therefore expected to grow by 5.9% in 2012-13 as market conditions improve. “Improved business sentiment will aid commercial building activity, although expectations need be tempered due to business concerns regarding the eurozone” adds Edwards. Consumer confidence is also expected to increase in conjunction with higher levels of real disposable income. These factors will lead to greater residential growth, with high-rise developments most beneficial for the industry. Industry operators are likely to see greater profits in the next five years as revenue increases. Major companies within the industry are more likely to capture profits, however, contractors will benefit from work trickling down as major companies hire more workers for large projects.
The Scaffolding Services industry exhibits a low level of market share concentration. Businesses tend to hire few staff in general due to the ability to act as contractors and take work on multiple projects during the year. Many industry operators are sole proprietors or partners, with only the large companies holding significant market share employing a large number of staff. These companies that employ a large number of staff for servicing tend to also be hiring and leasing firms, which hire a large number of staff due to the range of products they offer and their staff's ability to service many of them. Low barriers to entry as a scaffolding service provider mean that new entrants tend to appear in times of prosperity, looking to capture rising profits. The four largest players in the industry are Waco Kwikform, Seven Group, Cape Australia and Acrow.
For more information, visit IBISWorld’s Scaffolding Services report in Australia industry page.
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IBISWorld industry Report Key Topics
Scaffolding contractors hire and erect temporary framework used to support people and material in the construction and repair of buildings and other large structure (usually a system of metal pipes). Services include: planning and preparation of projects; the erection of scaffolding and equipment (i.e. setting of ground levels, bracing of components, and the positioning of platforms); the monitoring of scaffolding, and dismantling of scaffolding equipment on the completion of the job.
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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