Nursery Production in Australia Industry Market Research Report Now Updated by IBISWorld

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The Nursery Production industry will return to strong growth this year as a result of weather conditions and improved operational efficiency. For this reason, industry research firm IBISWorld has updated its report on the Nursery Production industry in Australia.

IBISWorld Market Research

IBISWorld Market Research

Over the past five years, dry conditions forced industry players to improve operational efficiency in order to remain viable.

The Nursery Production industry in Australia is showing signs of recovery, with revenue forecast to increase by 4.1% to $882.2 million in 2013-14. This contrasts with the expected annualised growth rate of 1.3% in the five years through 2013-14, which is partially attributable to dry conditions that reduced demand for industry products. According to IBISWorld industry analyst Nick Flores, “the drought forced consumers to curb plant and garden expenditure, which was exacerbated by stringent water restrictions”. Better rainfall in 2010, combined with the installation of rainwater tanks, lessened the water shortages that had been curtailing industry performance. Dry conditions forced industry players to improve operational efficiency in order to remain viable.

The trend towards higher density living and falling average garden sizes has negatively affected industry performance. This has been partially offset by the increased demand for indoor and patio plants in the move towards urban living. This has also been boosted by increases in dwelling commencements for the majority of the past five years. Furthermore, the rise of hardware retailers has attracted consumers away from traditional nurseries, which struggle to compete against big box stores' economies of scale and extensive supply chain networks. The ability of hardware retailers to drive prices down in times of economic uncertainty has put pressure on industry profit margins. “This has been intensified by volatile consumer sentiment and weak growth in household discretionary income over the past five years, as consumers attempt to reduce expenditure,” says Flores. This, combined with the volatility in prices of key inputs such as fertiliser, has caused the profit margins of local nurseries to be squeezed as they seek to reduce expenses in light of slowing product demand. The industry displays a low level of market concentration, with a majority of establishments operating as sole traders or partnerships.

Nursery Production industry revenue growth is likely to be driven by greater water availability and the more moderate levels of rainfall projected for the next five years. An expected increase in dwelling commencements for the same time period will benefit the industry, as new homes often incorporate landscaped gardens. Fragile consumer sentiment is forecast over the next five years, which is expected to detrimentally affect industry performance. Minimal growth in household discretionary income forecast during the same period indicates that industry players will need to curb costs and increase operational efficiency.

For more information, visit IBISWorld’s Nursery Production report in Australia industry page.

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

IBISWorld industry Report Key Topics

The industry includes businesses that are primarily involved in growing trees and shrubs, ornamental plants and bulbs. Businesses sell to retail or wholesale establishments, as well as landscapers, local government and councils, and orchardists. This industry excludes turf growing and flower growing.

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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Gavin Smith
IBISWorld
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