Melbourne, Australia (PRWEB) September 24, 2012
With a market that spans across the entire economy, the performance of business services is closely linked to economic conditions. More specifically, it is linked to the appetite and ability of businesses to spend on services. While some niche areas of service can be counter-cyclical, the majority of business services benefit from a strong economy. The vast majority of business services industries grew strongly before the emergence of the global financial crisis. The global financial crisis and the resulting slowdown resulted in lower spending by business on non-essential services and expansionary expenses. During this period, businesses shelved plans and looked to cut costs and pay down debt amid lower demand and difficulty in accessing capital. Areas such as marketing and recruitment services, surveying and architecture suffered greatly as the construction market contracted. In contrast, the emerging areas of online information and IT consulting were less affected. According to IBISWorld Industry analyst Ee Jen Lee, small sections of the Business Services subdivision benefited from the downturn, including the insolvency practices of legal and accounting firms, and consulting related to cost cutting and restructuring. Weakening commodity prices have triggered concerns that the mining boom is nearing its end. While the production of minerals and commodities may be slowing, there is little indication that the pipeline of investments will slow. Thus, in 2012-13, the subdivision is forecast to grow an estimated 0.8% in 2012-13 to $ 152.2 billion. Over the five years through 2012-13, revenue is forecast to grow an annualised 0.6%.
Over the next five years, the Business Services subdivision is forecast to recover in line with the overall economy. IT and communication industries will strengthen, says Lee. Investment into scientific research will grow owing to the green movement and the view that world-leading technology is a potential driver of growth in post-industrial economies.
The Business Services subdivision is considered to have a low level of market share concentration. Outlying industries within the subdivision include the Scientific Research industry, which is dominated by the CSIRO, and the Online Information Services industry, which is dominated by major media providers and directories. Most industries within the subdivision are characterised by low concentration and a large number of small, individual practices. This is partially a product of low barriers to entry (common to many business service practices), but also the knowledge-intensive nature of business services, which encourages firms to specialise in particular areas rather than increase in scale. Despite the large number of enterprises, competition is limited by region and the wide array of specialist fields. The five largest players in the subdivision are WorleyParsons, IBM A/NZ, Skilled Group, PricewaterhouseCoopers and the CSIRO.
For more information, visit IBISWorlds Business Services report in Australia industry page.
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IBISWorld industry Report Key Topics
Business Services is a subdivision within the Property and Business Services division of the Australian economy. It is made up of an array of industries that provide services primarily to other businesses. This includes engineering and design services, scientific services, information technology services, marketing services, legal and accounting services, employment services and a range of administrative support services.
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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