Growth in private capital expenditure has increased demand for industry services.
Melbourne, Australia (PRWEB) May 27, 2014
The Heavy Machinery Repair and Maintenance industry's performance has been mixed in the past five years, amounting to a general growth trend as downstream demand increased. A wide range of companies and businesses use heavy machinery repair and maintenance services to ensure plant and equipment continues to operate effectively. However, relatively weak growth in some key downstream sectors, such as manufacturing, has offset some of this growth. Overall, industry revenue is expected to increase at an annualised 2.3% over the five years through 2013-14 as demand from the mining sector contributed to higher industry revenue levels. Enterprise numbers are expected to increase by 3.5% per annum over the same years.
IBISWorld industry analyst Alen Allday states “growth in private capital expenditure has increased the pool of heavy machinery and, therefore, the need for repairs and maintenance.” Strong demand for machinery repair and maintenance from the Mining division has supported revenue over the past five years, while mixed growth in the Construction division has limited industry growth. The continued decline of the Manufacturing division due to strong import competition has weighed on demand for the repair and maintenance of industrial machinery. Industry revenue is expected to decline by 2.0% in 2013-14 to reach $4.7 billion. According to Allday, “this decline is mainly due to weakness in heavy and civil engineering construction demand, which is a major source of industry revenue.” However, some increased private capital expenditure on machinery and equipment will encourage increased spending on industry services. Over the past five years, profitability in heavy machinery repair and maintenance has increased from the historical low profit levels of 2008-09 during the worst of the economic crisis.
Market share concentration in the Heavy Machinery Repair and Maintenance industry is at a low level. This low level is due to industry players tending to specialise in particular machinery, markets and geographic locations, which limits growth and expansion. The specialised nature of many of the machines requiring repair and maintenance reduces the advantages of scale. Market share concentration is expected to have decreased over the past five years as the number of enterprises entering the industry increased strongly, fragmenting revenue further among industry players. The industry’s only major player is Komatsu Marketing Support Australia. For more information, visit IBISWorld’s Heavy Machinery Repair and Maintenance report in Australia industry page.
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IBISWorld industry Report Key Topics
Businesses in the industry repair, service and maintain a wide range of heavy machinery and equipment across a large number of client industries. These items include pumps and compressors, agricultural machinery and equipment, mining and construction machinery, machine tools, engines (except automotive), lifting and material handling equipment, and other heavy machinery and equipment.
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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