Industry profitability has narrowed over the past five years due to intensely competitive conditions across building markets.
Melbourne, Australia (PRWEB) March 04, 2015
Operators in the Electrical Services industry in Australia have faced challenging market conditions over the past five years, with the fallout from the global financial crisis causing weak demand in the housing and commercial building markets. However, some industry contractors managed to secure lucrative contracts from the unprecedented investment into mining-related structures and public capital expenditure programs. According to IBISWorld industry analyst Anthony Kelly, “Federal Government road projects and school refurbishment programs generated demand for electrical services, as did the reconstruction effort in the aftermath of the 2010-11 Queensland floods.” However, the subsequent winding back of public stimulus spending over the past few years has dampened demand for industry services.
Industry revenue is projected to grow by an annualised 1.2% over the five years through 2014-15, to total $19.3 billion. This includes growth of 1.5% in 2014-15, driven by improved investment into the housing market and ongoing maintenance activity on commercial and industrial premises. “Demand conditions are currently deteriorating in the infrastructure market with the winding back of investment into mining and electric power projects,” says Kelly. Industry profit margins have narrowed over the past five years due to intensely competitive conditions across building markets and growth in labour costs associated with skill shortages, particularly in Western Australia and Queensland. The number of industry enterprises is expected to increase at an annualised 0.5% over the five years through 2014-15, while the total industry workforce is expected to grow at an annualised 0.7% to 141,000 people. The industry displays a low level of market share concentration.
The industry's solid growth prospects are being supported by strengthening consumer and business confidence and continued growth in the new housing and commercial building construction markets. Conversely, demand for installation services in the industrial and engineering markets is projected to deteriorate as major energy and resource projects are completed and new projects are deferred due to slower growth in China and other major trade partners. Skills shortages are expected to be addressed over the next five years, assisting Electrical Services industry cost structures and growth.
For more information, visit IBISWorld’s Electrical Services industry in Australia report page.
This industry consists of contractors that install electrical wiring or fittings in buildings or other construction projects. Operators in the industry are also involved in the repair and maintenance of existing electrical equipment and fixtures.
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