Industry steams ahead after a period of heavy investment into rail infrastructure
Melbourne, Australia (PRWEB) March 27, 2014
The Rail Maintenance industry provides third-party below-rail maintenance services to the operators of Australia's freight and passenger rail networks. According to IBISWorld industry analyst Caroline Finch, “due to the high safety standards required to operate rail systems and protect assets, demand for maintenance of rail networks is relatively inelastic.” To grow, the industry has historically depended on trends towards outsourcing, as governments have involved the private sector to an increasing degree in managing railways. The other factor in demand for industry services is the extent of Australia's railways. When new track is constructed, the markets for maintenance services grow.
The industry has a high level of market share concentration, with the top four players estimated to account for just over 70% of industry revenue. The industry’s largest players are Leighton Holdings Limited, UGL Limited, Downer EDI Limited and Laing O’Rourke Australia Pty Ltd.
“In the past five years, the industry has been well positioned to benefit from growth in Australia's rail networks, with the concept of third-party maintenance services accepted by major markets,” says Finch. Industry revenue is estimated to grow at a compound annual rate of 5.1% in the five years through 2013-14. Growth of 6.6% over 2013-14 is forecast, taking the industry to $890.4 million. This expansion has followed a build-up of investment in rail construction over the past decade. Miners have invested heavily in their supply chains to get increased production to port. In addition, the Federal Government used rail projects as vehicles for stimulus spending following the global financial crisis.
In the next five years, the Rail Maintenance industry is forecast to expand further. All the industry's major markets have added to the assets they control in rail, with a stream of new and expanded maintenance contracts set to follow investment. These contracts lag behind construction activity, as new assets are cheaper to maintain initially, but are expected to underpin future industry growth. As revenue expands in maintenance while construction activity slows, companies that were involved in rail construction projects over the past five years are expected to increase their presence in the industry.
For more information, visit IBISWorld’s Rail Maintenance report in Australia industry page.
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IBISWorld Industry Report Key Topics
Companies in this industry are engaged in the maintenance and repair of rail lines. The construction of new infrastructure is excluded from the industry.
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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