An improving economy will drive demand for industry services
Melbourne, Australia (PRWEB) May 31, 2013
Industrial design firms primarily provide clients with designs for new products that they are interested in manufacturing. The Industrial Design Services industry has changed somewhat over the past five years, as the major markets in the Manufacturing division shrink or stagnate in response to the broader economic trends of reduced business investment and consumer spending after the global financial crisis. This has also led to a slowdown in research and development expenditure growth. According to IBISWorld industry analyst Ryan Lin, “as the factors that drive industry demand disappear, design firms have become more competitive when trying to win contracts and clients”. Demand has only remained healthy in the mining and information and computer science segments, but competition in these markets is significantly more intense as many of the players in these industries have well-resourced research and development departments of their own. Consequently, IBISWorld expects industry revenue to decline at an annualised 0.9% over the five years through 2012-13.
The Industrial Design Services industry exhibits a low level of concentration, with no major player operating in the industry. “This low concentration level is largely because of the nature of the industry, with highly fragmented product designs”, says Lin. Due to the relatively low barriers to entry, IBISWorld expects that the majority of industrial design firms are small, privately held firms that employ less than 30 people.
Over the next five years, competition is expected to remain intense as technological innovations expose the industry further to international industrial design firms and aspiring inventors who have a 3-D printer. Local manufacturing is expected to continue to struggle. The expectations of industrial design firms are also expected to increase as clients desire products that incorporate a thorough understanding of the economy and market they are being manufactured for. Therefore the industry is expected to undergo some consolidation, as firms that are unable to adapt are acquired or exit the industry. Revenue is forecast to return to growth over the five years through 2017-18 as an improving economy and R&D tax credits foster demand for the industry's services.
For more information, visit IBISWorld’s Industrial Design Services report in Australia industry page.
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IBISWorld Industry Report Key Topics
This industry includes companies that primarily develop designs and specification for mass-produced products. This includes deciding the materials, construction, mechanism, shape, colour and surface finishes of products to improve their market appeal, production, use and maintenance.
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.
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.