The industry has focused on high-tech areas of rail manufacturing, making most of its revenue from manufacturing components.
Melbourne, Australia (PRWEB) September 10, 2014
Operators in the Railway Equipment Manufacturing and Repair industry in Australia have managed to stay on track despite the overall difficult environment for manufacturing industries. Due to starting at a high level, industry revenue is forecast to decline at an annualised 3.1% over the five years through 2014-15, to $2.7 billion. Industry revenue is expected to contract by 3.6% during 2014-15. According to IBISWorld industry analyst Ryan Kerin, “industry demand has been strong over much of the past five years, but is beginning to wane as investment in railways by the Mining division slows.” Investment in commuter trains by state governments and increased government spending on rail networks have also affected the industry. The delivery of the last of 78 new trains as part of the Waratah project in Sydney caused industry revenue to decline during 2013-14. The project was touted as one of the largest rail investments in Australian history. A number of new projects are on the cards, including expansions of rail networks in both Sydney and Melbourne and the delivery of new, larger trams in Melbourne. This will buoy the industry over the next five years.
The industry has been able to prosper despite the strengthening Australian dollar, which has made many other areas of manufacturing uncompetitive. The industry has realigned itself to focus on high-tech areas of rail manufacturing, with the bulk of industry revenue coming from the manufacture of components rather than rolling stock. This has allowed specialised smaller players to remain in business even as the major players have turned towards assembly, shifting less complex production to countries with low labour costs. “Consequently, the industry has had to adjust to increasing import penetration,” says Kerin.
The Railway Equipment Manufacturing and Repair industry has a high level of market share concentration. Major players include UGL Limited, Downer EDI Limited, Bombardier Transportation Australia Pty Ltd and Bradken Limited. Passenger rail and freight railway operators represent close to 75.0% of the market, with mining companies and tram operators making up the remaining 25.0%. Through changing and adapting supply chain and manufacturing models, the industry's major players have been able to keep up with demand. The maintenance, repair and refurbishment contracts that come with increased capacity will help support industry revenue growth in the next five years.
For more information, visit IBISWorld’s Railway Equipment Manufacturing and Repair industry in Australia report page.
The Railway Equipment Manufacturing and Repair industry consists of establishments that manufacture or repair railway or tramway locomotives and rolling stock, such as wagons and passenger carriages. The industry excludes the construction and maintenance of railroads.
Follow IBISWorld on Twitter: http://twitter.com/#!/ibisworldau
IBISWorld industry Report Key Topics
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.