Riskiest Industries in Australia in 2021

1. Tobacco Product Wholesaling in Australia

2021 Overall Risk Score: 6.8

The Tobacco Product Wholesaling industry has faced declining consumer demand and rising prices over the past five years. The entries of Philip Morris Australia and British American Tobacco caused industry revenue to spike over 2015-16. However, industry revenue has stabilised over the past four years, as rising prices and excise taxes have offset declining smoking rates and fluctuating demand from downstream retailing industries. Overall, industry revenue is expected to grow at an annualised 1.0% over the five years through 2020-21, to total $2.9 billion. This growth includes an anticipated 2.0% increase in the current year, largely due to the government... Learn More

2. Fruit and Vegetable Processing in Australia

2021 Overall Risk Score: 6.5

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

3. Hay and Other Crop Growing in Australia

2021 Overall Risk Score: 6.4

The Hay and Other Crop Growing industry has been highly volatile over the past five years. Varying rainfall has presented some challenges to industry operators. Severe drought in New South Wales and parts of Queensland and South Australia created a surge in demand for hay as pasture conditions in these regions deteriorated. Many producers could not keep pace with rapidly increasing demand, resulting in hay shortages that increased prices. Hay prices in many regions reached 50-year highs over the three years through 2018-19. However, industry revenue declined in 2017-18 due to a significant decrease in output. Growing international demand for... Learn More

4. Shearing, Cropping and Agricultural Support Services in Australia

2021 Overall Risk Score: 6.4

The Shearing, Cropping and Agricultural Support Services industry provides a range of services to the Agriculture subdivision, such as livestock marketing and handling, cropping and shearing services. The industry's performance relies on demand from the farming sector, particularly cattle, sheep and grain industries. As a result, fluctuations in production volumes and prices of agricultural produce expose the industry to demand volatility. Many downstream farms have tried to improve operating efficiencies and increasingly consolidated, outsourcing non-essential functions to industry operators. Outsourcing trends in the agriculture sector have benefited industry operators over the past five years.

The Agriculture subdivision has reported decreased output... Learn More

5. Synthetic and Natural Textile Manufacturing in Australia

2021 Overall Risk Score: 6.3

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, most notably, the outbreak of COVID-19, which caused massive declines in exports and revenue in 2019-20. Apart from the COVID-19 downturn, industry operators have been exposed to intense competition from overseas manufacturers with low-cost production methods, 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... Learn More

6. Elevator Installation and Maintenance in Australia

2021 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, as well as undertaking subcontracting work on emergency repair... Learn More

7. Architectural Services in Australia

2021 Overall Risk Score: 6.2

Revenue for the Architectural Services industry has declined over the past five years. The effects of COVID-19 on business confidence have caused clients to cancel or postpone projects, restricting industry revenue streams. Strong competition in the industry has also placed downwards pressure on prices over the period, further reducing operators' ability to increase revenue and profitability. However, these trends have been slightly offset by the growing popularity of green architecture, which has supported industry revenue over the period. Overall, industry revenue is expected to fall at an annualised 3.2% over the five years through 2020-21, to $5.6 billion. Industry revenue... Learn More

8. Carpet and Textile Floor Covering Manufacturing in Australia

2021 Overall Risk Score: 6.2

Operators in the Carpet and Textile Floor Covering Manufacturing industry have faced falling demand over the past five years, along with declining enterprise numbers and lower industry employment. Industry revenue has been constrained by declines in dwelling commencements and multi-unit apartment and townhouse construction, high import competition and greater competition from substitute flooring products such as tiles and wooden floorboards. However, higher demand from non-residential building construction markets has helped limit revenue falls over the period. Furthermore, new carpet designs and colours have provided the industry with new products to supply to clients, which has provided some opportunities for specialist... Learn More

9. Credit Unions and Building Societies in Australia

2021 Overall Risk Score: 6.2

Successive cash rate cuts have negatively affected the Credit Unions and Building Societies industry's performance over the past five years. In an effort to stimulate the Australian economy, the RBA cut the cash rate to a historic low of 0.75% in October 2019. The cuts have limited the interest income generated on industry operators' loan books. Even more damaging has been the decision of many industry operators to exit the industry and convert to banks. As a result, a portion of the industry's revenue and asset base has been reclassified to the National and Regional Commercial Banks industry. Subsequently, industry... Learn More

10. Coal Mining in Australia

2021 Overall Risk Score: 6.1

Black coal is a key input into steelmaking and energy generation. Although black coal deposits are found all over the world, Australia is one of the world's lowest cost producers and a major black coal exporter. Domestic reserves exceed domestic demand, are high grade and economical to access. As a result, exports account for a large share of industry revenue. Imports are negligible in the industry, as total local production has been higher than domestic demand for black coal. Brown coal is used domestically for electricity generation in Victoria.

Industry revenue is expected to rise at an annualised 7.8% over the... Learn More