Industries with the Highest Labor Costs in Australia in 2022

1. Health Services in Australia

Labor Costs for 2022: $84.5B

The Health Services subdivision includes a range of health services and facilities. General hospitals are the subdivision's largest revenue driver, accounting over half of Australia's health services revenue. General practitioners (GPs), clinical specialists and dentists also represent significant revenue streams for the subdivision. Australia's growing and ageing population has generated strong demand for health services over the past five years. However, the outbreak of COVID-19 in early 2020 has limited subdivision expansion, as health services have redirected resources to contain the virus. Consequently, subdivision revenue is expected to grow at an annualised 1.6% over the five years through 2021-22, to... Learn More

2. Community Services in Australia

Labor Costs for 2022: $39.9B

Organisations in the Community Services subdivision play an important role in supporting Australia's welfare system. Subdivision operators help to arrange care and counsel for individuals in need, including the economically disadvantaged and other vulnerable members of society, such as children and the elderly. Not-for-profit organisations and private enterprises in the subdivision are expected to receive $70.0 billion from government funding, donations and private income in 2021-22. Subdivision revenue is expected to increase at an annualised 4.3% over the five years through 2021-22. Favourable demographic trends and ongoing government funding have contributed to revenue growth. The COVID-19 pandemic has also supported... Learn More

3. Finance in Australia

Labor Costs for 2022: $30.2B

The Finance subdivision's operating environment has been challenging over the past five years, due to falling interest rates. Residential property prices have risen over the period, supporting demand for mortgages. However, volatile business confidence over the period has limited growth in capital expenditure from the private sector and overall demand from commercial clients. Overall, subdivision revenue is expected to decline at an annualised 2.2% over the five years through 2021-22, to $186.7 billion. Subdivision revenue is anticipated to rise by 1.9% in 2021-22, as most operators have closed and wound down deferrals on loan repayments during the COVID-19 pandemic.

The RBA's... Learn More

4. Aged Care Residential Services in Australia

Labor Costs for 2022: $18.1B

As Australia's population ages, demand for age-appropriate housing increases. Older individuals are more susceptible to a range of age-related ailments and need more assistance with everyday activities and personal care. As aged-care requirements have changed over the past five years, the Aged Care Residential Services industry has expanded, offering different lifestyle accommodation options. This expansion, combined with more flexible pricing and ongoing government funding for aged-care, has supported revenue growth over the period.

A challenging operating environment has limited the industry's growth over the past five years. Industry revenue is expected to rise at an annualised 2.2% over the five years... Learn More

5. Consumer Goods Retailing in Australia

Labor Costs for 2022: $17.5B

The Consumer Goods Retailing subdivision has been subject to difficult retail conditions over the past five years. The COVID-19 pandemic has caused economic uncertainty and restricted trading for extended periods in several Australian states. However, the pandemic has also prevented many consumers from spending money on hospitality and travel, allowing greater income to be spent on consumer goods. As a result, the subdivision has posted modest growth over the past five years.

Subdivision operators have contended with growing competition from online-only retailers, as consumers have become increasingly comfortable with making online purchases over the past five years, particularly during the COVID-19... Learn More

6. University and Other Higher Education in Australia

Labor Costs for 2022: $17.1B

The University and Other Higher Education industry has undergone significant review and reform over the past decade. Since 2012, the Federal Government has uncapped enrolment places for universities, instead introducing a demand-driven system that has enabled industry operators to offer a higher number of places for most degrees. The government also removed the cap on Commonwealth supported places under the Commonwealth Grants Scheme, which has significantly increased public expenditure on universities over the past five years. In 2017, government funding for bachelor courses was capped at 2017 levels, and this cap remained in place for the 2018 and 2019 calendar... Learn More

7. Supermarkets and Grocery Stores in Australia

Labor Costs for 2022: $12.7B

The Supermarkets and Grocery Stores industry is one of the most fiercely competitive industries in Australia. While price-based competition has decreased over the three years through 2020-21, the continued expansion of ALDI and Costco has forced the two established industry giants, Woolworths and Coles, to remain price-competitive. To differentiate themselves from low-cost supermarkets, Coles and Woolworths have increasingly focused on improving customers' shopping experience through store refurbishments and increased online shopping capabilities. These major players are increasingly relying on loyalty programs and promotions rather than discounts.

Sluggish economic conditions, including weak growth in disposable incomes, weighed on industry revenue over the... Learn More

8. Employment Placement and Recruitment Services in Australia

Labor Costs for 2022: $11.9B

Australia's unemployment rate, the total size of the labour force and business confidence all strongly influence demand for industry services. Negative business confidence tends to reduce demand for the industry's recruitment services, as it reflects a business environment where fewer client businesses employ additional staff. Furthermore, increases in the national unemployment rate can negatively affect industry growth, as industry clients typically advertise fewer jobs.

After performing well over the two years through 2018-19, industry demand and revenue declined in 2019-20 and 2020-21 due to the negative effects of the COVID-19 pandemic. A higher national unemployment rate and a decline in the... Learn More

9. Road Freight Transport in Australia

Labor Costs for 2022: $11.0B

The Road Freight Transport industry dominates the Australian non-bulk market due to its ability to offer a door-to-door delivery service, and its competitive advantages in price, convenience and reliability. The industry's largest vehicles transport goods between and across states, competing with rail, water and air freight industries. Industry firms typically use light commercial vehicles for the final stage of delivery. As the industry's major markets span the entire economy, demand for road freight transport services is a strong indicator of economic growth.

Industry revenue is expected to rise at an annualised 4.0% over the five years through 2021-22, to $62.4 billion.... Learn More

10. Private General Hospitals in Australia

Labor Costs for 2022: $8.1B

The Private General Hospitals industry has grown modestly over the past five years, supported by Australia's ageing population. Rising rates of obesity have also increased demand for private hospital services due to an increasing incidence of weight-related diseases and illnesses, along with higher demand for elective surgeries such as weight loss procedures. However, the declining affordability of private health insurance has reduced membership numbers over the period, as young people have increasingly left the private health insurance system due to continually rising premiums and a perceived lack of value. Activity volumes as measured by hospital separations and patient days have... Learn More