Melbourne, Australia (PRWEB) December 16, 2013
The Women's and Girls' Wear Manufacturing industry in Australia has performed poorly over the past five years. Increasing international pressure in the form of cheap imports has damaged the industry as tariffs have been slowly reduced. According to IBISWorld industry analyst Lauren Magner, “import penetration has been the major concern for the industry, and a soft retail market due to the onset of the global financial crisis did not help its performance”. Consumer spending dropped as sentiment fell dramatically. A high Australian dollar exacerbated import competition, as consumers turned to mediums such as online shopping to purchase relatively cheaper goods. As a result, industry revenue is estimated to decline by an annualised 3.9% over the five years through 2013-14. While conditions have begun to improve, declines are still evident as industry revenue is expected to drop by a further 3.9% in 2013-14, to total $589.6 million.
Declining industry demand, both domestically and internationally, has resulted in a decline in the number of enterprises operating in the industry. Low wage and capital costs in parts of Asia (particularly China) have provided companies with significant incentives to move production offshore and capture greater profit margins. “Establishment numbers have declined at an even faster rate as businesses have downsized operations,” says Magner. The industry exhibits a low level of market share concentration, with only company, Cue & Co Pty Ltd, controlling a significant portion of revenue.
The future of the Women's and Girls' Wear Manufacturing industry is less daunting, but declines in revenue are still expected. The Australian dollar is forecast to remain high over much of the next five-year period, contributing to further increases in import competition. Tariffs are also expected to come down to 5.0% in 2015, from the current 10.0%. The industry's key downstream market, women's and girls' wear retailing, is expected to improve. Import competition is likely to offset this positive factor, as imports are expected to make up over 80.0% of domestic demand over the next five years. Consumers are also turning to new mediums such as online shopping to purchase clothing, resulting in greater access to global markets. The industry is expected to move towards manufacturing more-versatile and customisable products over the next five years, as competitive advantage lies in high value added production.