Melbourne, Australia (PRWEB) May 01, 2014
Across the Sand and Gravel Quarrying industry in Australia, revenue growth has been limited in the five years through 2013-14 due to low building construction growth and weak increases in demand from concrete manufacturing companies. Low industry growth has been the result of difficult operating and economic conditions through 2010-11 and 2011-12 as building activity slowed in response to domestic economic uncertainty, which limited investment in building and construction. However, a stronger economy in subsequent years, greater building activity and increased concrete demand contributed to improved operating conditions for sand and gravel quarries, driving industry output and revenue in 2012-13 and 2013-14. According to IBISWorld industry analyst Alen Allday, “the industry also benefited from ongoing public sector spending on infrastructure and non-dwelling construction projects over the past five years, with these works requiring concrete inputs that use sand and gravel.”
Industry revenue is estimated to increase by 3.2% in 2013-14 to $594.6 million. Growth late in the five-year period has helped offset previous declines. As a result, revenue is expected to increase at an annualised 0.5% over the five years through 2013-14. “Despite this overall growth, industry profitability has fallen due to higher fuel and cartage costs, and higher wage levels,” says Allday. However, the industry is still highly profitable. The high profit level is due to limited substitute competition and low import competition due to very high transportation costs. The industry exhibits a medium level of market share concentration. Major players include Boral Limited, Holcim (Australia) Holdings Pty Ltd, Hanson Australia (Holdings) Proprietary Limited and Fletcher Building Limited.
Industry performance is expected to continue improving over the next five years. This growth will occur as the Australian economy strengthens and construction activity grows in response to investment in mining, infrastructure and housing. Pent-up demand for housing is expected to be a major driver of growth after several years of low or declining construction activity. Road and highway construction is also expected to contribute to Gravel and Sand Quarrying industry demand, while infrastructure construction will also require extensive concrete inputs. Industry profitability is forecast to increase, as sand prices rise in response to diminishing supply.
For more information, visit IBISWorld’s Gravel and Sand Quarrying report in Australia industry page.
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IBISWorld industry Report Key Topics
Firms in this industry operate sand and gravel quarries, and may also wash or screen the products recovered.
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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