The future industry concentration level is forecast to remain at a similar moderate level as there are expected to be few mergers in the next five years and limited growth across the largest players.
(PRWEB) March 19, 2015
Revenue for the Sewerage and Drainage Services industry is expected to grow at an annualised rate of 3.7% over the five years through 2014-15, to reach $7.3 billion. This reflects higher sewerage service prices and an increase in volumes treated, largely due to rising business numbers and general population growth. Revenue is expected to increase by 3.8% in 2014-15 as the industry continues to expand at a stable rate, providing wastewater collection and treatment services to more customers. State government-owned business enterprises account for nearly all the industry's operations. This is due to the high capital costs required to develop sewage-collection pipe networks and sewage treatment plants. Private enterprises have a low presence across the industry. However, some sewerage authorities have outsourced some industry functions. For example, SA Water has a joint venture with France-based Suez Environnement to operate its sewerage network.
Establishment numbers have declined in the past five years as local authorities have merged and combined operations. An example of this is the creation of Queensland Urban Utilities in July 2010, which combined water and sewerage authorities in Brisbane, Ipswich, the Lockyer Valley, Scenic Rim and Somerset Regional Councils into a single entity. Despite these declines, industry employment has increased over the past five years as service demand, maintenance and management requirements have increased. According to IBISWorld industry analyst Alen Allday, “the Sewerage and Drainage Services industry revenue is expected to grow at a slightly higher rate than the population during the next five years, reflecting the price rises that will be necessary to fund sewerage network maintenance and new investment.” However, revenue growth is expected to be lower than in the past five years as the industry starts to mature. With steady revenue growth and service pricing increases, industry profit is expected to increase over the next five years.
Despite this overall moderate concentration level of the industry, it is highly concentrated at a state level. Often only a relatively small number of government-owned organisations account for the great bulk of operations in particular states. This structure reflects high levels of urbanisation and the resulting need to remove and process effluent. “The future industry concentration level is forecast to remain at a similar moderate level as there are expected to be few mergers in the next five years and limited growth across the largest players compared to the industry total,” says Allday.
For more information, visit IBISWorld’s Sewerage and Drainage Services industry in Australia report page.
Firms in the industry operate sewerage systems, drainage systems and sewage treatment plants.
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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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