Melbourne, Victoria (PRWEB) March 18, 2015
Over the past five years, the Boatbuilding and Repair Services industry has struggled significantly. According to IBISWorld industry analyst Spencer Little, “weak consumer sentiment and discretionary income have limited consumers' expenditure on boats and other luxury vessels in the years following the global financial crisis.” These trends contributed to a massive 26.3% drop in revenue in 2009-10. Domestic demand for new boats continued to decrease as customers looked to delay expenditure or cancel non-essential purchases altogether. Overall, industry revenue is estimated to decline at a compound annual rate of 5.1% over the five years through 2014-15, to reach $1.0 billion. Improving demand conditions and rising discretionary income are set to result in a 1.5% jump in revenue in 2014-15.
An appreciating Australian dollar over the three years through 2012-13 placed further pressure on the industry's volatile export markets. With demand for luxury items already limited, a strong Australian dollar sapped any remaining demand from major export markets such as the United States. Australian-built boats became far more expensive in export markets, while imports became cheaper in the domestic market, pushing any remaining domestic demand away from locally manufactured products. These pressures have forced many smaller and less viable operators out of the industry over the past five years. The industry is set to improve slightly over the next five years. Negative consumer sentiment in 2016-17 and 2018-19 is likely to force consumers to delay luxury purchases until their household finances and economic outlooks improve, or cancel expenditure on non-essential products altogether. “Rising leisure time, particularly among Australia's ageing population, may provide an opportunity for boatbuilders, as these consumers typically have more time to spend on recreational boating activities,” says Little. A depreciating Australian dollar over this period is also likely to ease import penetration and assist local boatbuilders that target export markets.
The Boatbuilding and Repair Services industry displays a low market share concentration. Riviera Australia is the industry's only major player. Over the past five years, market share concentration has increased slightly, as Riviera Australia has outperformed the overall industry over this period. Many small-scale enterprises operate in the industry. According to ABS counts of business data, in 2012-13 only 35 companies employed more than 200 staff, while over 94.0% of enterprises generated less than $2.0 million in revenue. In addition, many firms that provide boat repair services are non-employing sole-proprietors, which further contributes to the industry's fragmented structure.
For more information, visit IBISWorld’s Boatbuilding and Repair Services industry in Australia report page.
Companies in the industry primarily build or repair small- to medium-sized boats and vessels with a displacement of under 50 tonnes.
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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
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