Riskiest Industries in Australia in 2020

1. Fossil Fuel Electricity Generation in Australia

2020 Overall Risk Score: 6.3

Operators in the Fossil Fuel Electricity Generation industry have grappled with a changing regulatory environment and volatile wholesale prices over the past five years. Fossil fuel-fired power stations supply most of Australia's electricity. These power plants mainly run on black coal, brown coal and natural gas. Black and brown coal-fired power stations are often run continuously to provide baseload power, while natural gas stations can be fired up quickly to provide peaking power during spikes in demand. Industry revenue is expected to rise at an annualised 5.0% over the five years through 2019-20, to $12.0 billion.

Fossil fuel electricity generation is... Learn More

2. Paint and Coatings Manufacturing in Australia

2020 Overall Risk Score: 6.2

The Paint and Coatings Manufacturing industry is a key component of Australia's broader chemical manufacturing sector. The industry includes major players with strong national and global brand names across different pricepoints and product segments, which are vertically integrated. As a result, competition occurs across the supply chain, rather than just at the manufacturing level. Furthermore, as these operators are global players, consolidation trends currently characterising the global paint and coatings sector are influencing the Australian marketplace. For example, DuluxGroup is now a subsidiary of the Japan-based Nippon Paint, following an unsolicited $3.8 billion offer in April 2019. DuluxGroup was previously... Learn More

3. Elevator Installation and Maintenance in Australia

2020 Overall Risk Score: 6.2

The Elevator Installation and Maintenance industry installs, maintains and repairs elevators, escalators and moving walkway systems (travelators) on buildings and other structures, particularly in multistorey developments. Trends in non-residential and residential construction heavily influence the industry's performance. In particular, the increasing density of residential areas has resulted in significant volumes of high-rise apartment construction. The industry is dominated by four major players that are subsidiaries of global manufacturers, and suppliers of elevators and other building equipment. Smaller industry contractors tend to focus on maintaining and refurbishing existing elevator and escalator systems, and undertaking subcontracting work on emergency repair services.

Industry revenue... Learn More

4. Iron Ore Mining in Australia

2020 Overall Risk Score: 6.2

The Iron Ore Mining industry has benefited from rising prices and higher production volumes over the past five years. As a result, industry revenue is expected to increase at an annualised 1.7% over the five years through 2019-20, to $83.4 billion. However, this trend includes an anticipated 8.7% decline in the current year, due to reduced iron ore prices and demand from China as the COVID-19 pandemic results in lower steel manufacturing output. Despite this, strong economic growth in China over the past decade has driven developments in Australian iron ore mining to meet Chinese demand for greater steel production.... Learn More

5. Fruit and Vegetable Processing in Australia

2020 Overall Risk Score: 6.1

Industry operators have faced tough trading conditions due to increasing external competition over the past five years. Rising import penetration and high operating costs have negatively affected the industry's performance, reducing the competitiveness of industry products in overseas markets. Lower prices also made imports preferable over domestic products. Therefore, imports have surged as a share of domestic demand over the past five years, encouraging some domestic processors to relocate manufacturing offshore or invest in automation to reduce labour costs. Moreover, supermarkets have increasingly sourced processed goods from overseas for their private-label brands. Consequently, the rising popularity of private-label products has... Learn More

6. Pharmaceuticals Wholesaling in Australia

2020 Overall Risk Score: 6.0

Operators in the Pharmaceuticals Wholesaling industry procure, distribute and sell a range of pharmaceutical and medicinal products. Pharmaceutical wholesalers are also an important link between local and international pharmaceutical manufacturers and Australia’s community pharmacies. Products sold by the industry include prescription medicines, pharmacy-only medicines, over-the-counter (OTC) medicines, other healthcare products and veterinary pharmaceuticals.Changes to the industry’s operating environment and ongoing reforms to the Pharmaceutical Benefits Scheme (PBS) have limited the industry’s performance over the past five years. Recent changes to the PBS, including compulsory price cuts to many generic and off-patent drugs, represent the most significant industry reform since the... Learn More

7. Synthetic and Natural Textile Manufacturing in Australia

2020 Overall Risk Score: 6.0

The Synthetic and Natural Textile Manufacturing industry consists of three primary segments: wool scouring, synthetic textile manufacturing and natural textile manufacturing. Industry operators have struggled with difficult trading conditions over the past five years, which have caused revenue to decline. Industry operators have been exposed to intense competition from overseas low-cost manufacturers, with imports accounting for a large proportion of domestic demand. Industry operators have also been vulnerable to exchange rate fluctuations, as the industry heavily relies on exports. Ongoing contractions in domestic downstream industries have further constrained revenue, as demand for industry products from textile product manufacturers has fallen.... Learn More

8. Leather and Leather Substitute Product Manufacturing in Australia

2020 Overall Risk Score: 5.9

The Leather and Leather Substitute Product Manufacturing industry includes firms that produce and process leather hides and other animal skins, along with operators that manufacture leather and leather substitute products, such as wallets, saddles and handbags. The industry excludes leather clothing and footwear manufacturing. Industry firms have struggled over the past five years. Demand from clothing and footwear manufacturers, which represent key markets for the industry, has declined over the period. While leather is a key input for these manufacturers, industry players also compete with manufacturers that produce other fabrics and materials. Rising demand from personal accessory retailers has partially... Learn More

9. Aluminium Smelting in Australia

2020 Overall Risk Score: 5.9

Australia is the world’s largest producer of bauxite and a substantial producer of alumina. However, the country ranks sixth in global aluminium output, with China being the leading producer. Australia is expected to produce 1.5 million tonnes of aluminium in 2019-20, down from 1.6 million tonnes in 2014-15. Industry revenue is expected to decline at an annualised 4.8% over the five years through 2019-20, to total $4.7 billion. Industry revenue is expected to fall by 10.1% in the current year, due to a decline in output.Exports are estimated to account for 79.5% of the Aluminium Smelting industry’s revenue in 2019-20,... Learn More

10. Horse and Dog Racing in Australia

2020 Overall Risk Score: 5.9

Horse and greyhound races are fixtures of Australia's sporting culture and the annual Melbourne Cup is the highlight of the Horse and Dog Racing industry. However, industry participants have faced challenges over the past five years. Declining attendance at racing events and rising interest in alternative forms of entertainment and gambling have negatively affected industry operators over the period. Additionally, ticket sales and revenue from other thoroughbred, harness and greyhound races have declined over the past five years. Growing animal welfare concerns among the Australian public have also softened demand for racing events. In particular, media coverage of former race... Learn More