Industries to Watch in the Australian Manufacturing Sector
There is no denying that COVID-19 continues to wreak havoc on the global economy, but it’s not all doom and gloom in the Australian manufacturing sector.
Trusted industry researchers, IBISWorld, has identified several industries making good use of advanced manufacturing capabilities, new health and sustainability trends, and disruptive technologies to achieve growth.
IBISWorld Senior Industry Analyst Suzy Oo said the manufacturing sector is expected to grow at an annualised 1.2% over the next five years, to $421.3 billion.
“The expected outperformance of these manufacturing industries demonstrates that it is not all doom and gloom in the Australian manufacturing sector. By focusing on innovation, effective marketing, and favourable economic trends, these industries are able to excel,” she said.
Soap and Cleaning Compound Industry
Coast to Coast Australia was not surprised to hear that Soap and Cleaning Compound manufacturing was booming, with revenue expected to rise by 1.5% in 2020-21.
Clearly, changes in personal hygiene practices-and industrial and commercial cleaning protocols -are driving innovation, with the launch of new anti-bacterial wipes and gels, and more local production of hand sanitisers and anti-bacterial liquid hand wash.
“To differentiate themselves in a mature and saturated market, soap and cleaning compound manufacturers are anticipated to continue launching new products and expanding product lines over the next five years,” said Ms Oo.
Industry revenue is projected to increase at an annualised 2.8% over the five years through 2025-26, to $2.8 billion.
Medical and Surgical Equipment Manufacturing
Again, no surprises here. With the onset of COVID-19, demand rose for a range of medical equipment, such as ventilators and infusion pumps. Revenue in this sectoris expected to increase by 3.5% in 2020-21.
“Over the next five years, ongoing investment in R&D among industry players will likely promote product innovation and boost global demand,” said Ms Oo.
“Australia’s ageing population and rising obesity levels will likely increase the number of high-risk patients over the period, creating stronger demand from public and private hospitals. This trend, combined with greater public health expenditure, is projected to provide growth opportunities in the domestic market. Industry revenue is forecast to rise at an annualised 3.7% over the five years through 2025-26, to $6.6 billion.
”The Australian Government is investing $6.6 billion in health and medical research over the next four years, including $125.0 million in funding to enhance public access to medical equipment and services in regional areas.
Interestingly, revenue in this industry is expected to grow at an annualised 4.9% over the five years through 2025-26, to $687.6 million.
“High-end mattress manufacturers are increasingly offering customisable products, which can be tailored to a customer’s body weight and contours. Advanced materials, such as memory foam, gels and hypoallergenic latex, are also improving product comfort and durability, ”said Ms Oo.
Other firms are disrupting the mattress sales model by bypassing the retail sector and selling direct to consumers.
“Some start-up businesses have adopted the bed-in-a-box business model, which involves selling latex and memory foam mattresses to online customers in a convenient, compact package form. These start-ups have used sustainability, convenience and long trial periods to stand out in the industry,’ said Ms Oo.
Success within this industry is also related to the massive expansion of public hospitals and aged care services. The number of Australians aged 70 and older is forecast to grow at an annualised 3.3% over the next five years, driving demand for mattresses.
As travel restrictions ease and tourism rebounds, accommodation businesses are also likely to boost demand for new mattresses.
“Luxury and semi-luxury accommodation providers that operated as quarantine facilities are anticipated to invest in premium mattress options to revive brand associations and reinforce their luxury image,”said Ms Oo.
The wine industry was seriously disrupted in 2020-21, with China’s anti-dumping duties on Australian wine. Access to that market previously accounted for 14.3% of industry revenue.
However, although revenue is expected to fall by 8.3% in 2020-21, effective marketing should drive a rebound in revenue for Australian wine makers over the next five years.
“Amid trade tension with China, Australian wineries are expected to refocus on export opportunities in Canada, South Korea, Taiwan and Indonesia,” said Ms Oo.
“Globally, consumers are increasingly emphasising organic, natural and minimal-intervention wines. Domestic wineries have an opportunity to build on Australia’s existing reputation as a natural producer of luxury wine and drive demand growth in new markets.
”We are also seeing less foreign competition, due to poor harvests overseas over the past four years. Meanwhile, Australian wine production has strengthened.