Melbourne, Australia (PRWEB) May 17, 2013
The Fire Protection Services industry in Australia has simultaneously benefited and suffered as a result of its dependence on its key downstream markets. Activity in its principal source of revenue - the commercial and industrial building construction sectors - has been volatile, with the global financial crisis taking its toll on new project commencements as investor confidence plunged and wholesale funding costs rose. This had a negative effect on industry revenue, as evidenced by successive revenue declines between 2008-09 and 2010-11. According to IBISWorld industry analyst Naren Sivasailam, “activity in the commercial construction sector has since recovered, particularly in the office, retail and hotel segments.” This is the industry's primary source of revenue because all new commercial and industrial buildings are legally mandated to have fire protection systems installed. Additionally, the resurgence of multi-unit residential apartments as a result of changing consumer trends has resulted in increased demand for the industry's products and services. While the residential building sector has been a smaller source of revenue, high-rise buildings often have sophisticated fire protection systems comparable to their commercial or industrial counterparts. In the five years through 2012-13, industry revenue is estimated to decrease by an annualised 1.2%.
The industry has a low level of concentration given that there are just two major companies operating in the industry: Tyco International Pty Limited and Chubb Security Holdings Australia Limited. These are both part of large multinational companies operating across several related industries on a global scale. “They therefore have a major advantage over smaller player given their access to global supply chain operations and economies of scale,” says Sivasailam. These factors act as a buffer against fluctuations in operating costs and downstream demand. The level of concentration has remained steady over the past five years, with the presence of large multinational players acting as a major barrier to entry for new locally owned companies.
The outlook for the Fire Protection Services industry will be underpinned by the performance of the commercial and industrial building sectors. While the short-term outlook for these sectors is pessimistic, IBISWorld anticipates a spirited resurgence towards the second half of the next five-year period. The peak of mining investment is expected to pass, resulting in greater capital investment expenditure in non-mining sectors, particularly in non-residential buildings such as offices and retail spaces. The growth of multi-unit apartments, especially in inner-city areas, is expected to continue as housing affordability, changing demographics and family structures drive the move towards major urban centres. This move towards high-density living will bode well for the industry's services as developers seek to adopt industry best practise and install modern and sophisticated fire protection systems in these buildings.
For more information, visit IBISWorld’s Fire Protection Services report in Australia industry page.
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IBISWorld Industry Report Key Topics
Firms in this industry provide consultancy services, installation and servicing of fire protection systems.
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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