The industry benefits from increased business numbers and confidence
Melbourne, Australia (PRWEB) January 06, 2013
The Procurement Outsourcing Services industry has enjoyed buoyant conditions over the five years through 2012-13. With the industry's markets being highly diversified, it has benefited from the growing number of Australian businesses. These businesses are also increasingly outsourcing their activities, which has supported demand for outsourced procurement services. An overall increase in business confidence has backed growth in procurement activities and volumes. Some of these activities are outsourced to the industry, benefiting industry revenue. According to IBISWorld industry analyst Aries Nuguid, “increases in capital expenditure by businesses' customers on new capacity and processes have also strengthened demand for procurement outsourcing over the past five years”. The greater interconnectedness of business through the internet has made the outsourcing of procurement functions easier.
While conditions have been positive for the industry overall, a dip into negative business confidence due to the global downturn has slowed industry revenue growth over the five years through 2012-13. As companies became less confident in their financial outlook, procurement activity slowed, which hurt demand for industry services. “The poor business confidence also caused a mismatch between capacity in the industry and demand for industry services”, says Nuguid. The capacity and demand mismatch heightened competition between industry operators and pressured operating margins.
The Procurement Outsourcing Services industry is expected to grow by a solid 8.9% in 2012-13. The popularity of outsourcing as Australian businesses strive for greater efficiency is expected to back the rapid growth in industry revenue. An expected large expansion in capital expenditure by the private sector during the year will also support demand for procurement outsourcing services.
An increasing number of businesses outsourcing will support industry growth over the next five years. Business confidence is forecast to increase, which will boost procurement activity, some of which will be outsourced to the industry. Expected increased capital expenditure on new capacity and processes will increase demand for industry services as Australian businesses cope with the rapid capacity expansions.
For more information, visit IBISWorld’s Procurement Outsourcing Services report in Australia industry page.
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IBISWorld industry Report Key Topics
Companies in this industry act as a third party to provide procurement services for clients, including direct and indirect procurement. Procurement outsourcing allows client companies to reduce costs, improve efficiency and enhance performance.
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
About IBISWorld Inc.
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