Least Risky Industries in the UK in 2021

1. Shipbuilding in the UK

2021 Overall Risk Score: 3.12

In the Shipbuilding industry, operators build military vessels for the Royal Navy and foreign governments. Industry revenue is forecast to increase at a compound annual rate of 2.8% over the five years through 2020-21 to reach £5.7 billion. Revenue growth has been supported by the construction of Queen Elizabeth class aircraft carriers during the past five years. The weak pound also led to foreign governments bringing forward orders. Moreover, due to the long turnaround times for construction, shipyards specialising in refits and rebuilds benefited from higher demand. Revenue growth was constrained in 2019-20, due to some projects being completed.... Learn More

2. Document Management Services in the UK

2021 Overall Risk Score: 3.41

Industry operators provide outsourced document storage, destruction and digitalisation services to commercial and government clients. Strict data protection regulations and a preference shown by downstream firms to outsource document management services amid rising cost pressures is expected to have supported industry demand in recent years. This trend has been most prominent within the public sector, where departmental budget cuts have forced government departments to downsize their estates and pursue space saving endeavours. Strengthening demand for digitisation services has also supported the industry over the past five years. However, competition from firms specialising in cloud storage, as well as technological developments... Learn More

3. Reinsurance in the UK

2021 Overall Risk Score: 3.44

Reinsurance is the business of insuring insurance policies so that direct insurers can manage their risk and limit their liabilities. Reinsurers often also use reinsurance to manage their own policy risks or to generate profit by insuring reinsured policies. This process is known as retrocession. Reinsurance is a global business, as risks in certain geographies can be minimised by spreading coverage across a variety of markets. Firms in this industry generate their revenue from policy premiums and investment income.

Over the five years through 2020-21, industry revenue is anticipated to increase at compound annual rate of 4.2% to reach £17.5 billion.... Learn More

4. Machine Tool Wholesaling in the UK

2021 Overall Risk Score: 3.45

The Machine Tool Wholesaling industry supplies a variety of machine tools to the manufacturing, construction, mining and forestry industries, amongst others. There has been some consolidation activity in the industry, with vertical integration of manufacturers and wholesalers diminishing profit margins over the five years through 2021-22. Additionally, the industry has faced low business confidence and a strong depreciation in the value of the pound since the EU referendum result, leading to major markets halting investment plans and rising purchasing costs for operators. This has negatively affected industry performance over the period. However, resilient construction sector and industrial production have limited... Learn More

5. Chemical & Fertiliser Mineral Mining in the UK

2021 Overall Risk Score: 3.47

The Chemical and Fertiliser Mineral Mining industry has been subject to volatile conditions over the past five years. The industry transitioned to the production of polyhalite, which led to a substantial reduction in potash prices and significant decline. As a result, IBISWorld expects industry revenue to decrease at a compound annual rate of 9% to reach £90.4 million over the five years through 2020-21. However, in the current year, revenue is expected to rise by 1.2% as the largest industry operator, Cleveland Potash Ltd, has transitioned into a polyhalite only mining business. Industry players were able to continue production despite... Learn More

6. Risk & Damage Evaluation in the UK

2021 Overall Risk Score: 3.52

The industry acts as an outsourced claim adjusting and processing service for insurers. The industry also provides services to policyholders in the form of independent third-party validation, or the contesting of evaluations made by assessors employed by the insurers underwriting the policy. Demand for the industry's services is closely aligned with the level of outsourcing insurers opt to undertake, insurance coverage and the occurrence of insured risks that give rise to the need for assessing damage caused and the level of pay-outs. Over the five years through 2020-21, industry revenue is expected to increase at a compound annual rate of... Learn More

7. Dam, Harbour & Other Water Project Construction in the UK

2021 Overall Risk Score: 3.57

Operators in the Dam, Harbour and Other Water Project Construction industry undertake water-based civil engineering projects that facilitate water storage, containment and transport. Some firms specialise in dock, harbour and marina developments for water transport, while others concentrate on maintaining water infrastructure, containing flooding, and preserving natural waterways and coastal regions. Industry revenue is forecast to rise at a compound annual rate of 11.1% over the five years through 2020-21, including growth of 8.5% in the current year, to reach £713.3 million, owing to supportive demand conditions, a sustained rise in public-sector funding and the cyclical nature of water companies'... Learn More

8. Railway Equipment Manufacturing in the UK

2021 Overall Risk Score: 3.58

The industry relies heavily on long-term rolling stock replacement contracts. These contracts have long lead times and involve periodic payments throughout the manufacturing process, followed by a balloon payment when the project reaches completion. This creates a high level of revenue and profit volatility. Industry revenue is forecast to increase at a compound annual rate of 10.7% over the five years through 2020-21 to reach £2.5 billion. The industry's performance is heavily dependent on the performance of Alstom Transport and Hitachi, and in 2020-21, these two firms are estimated to account for 47.7% of industry revenue between them.

In 2020-21, revenue... Learn More

9. Air Transport Equipment Rental & Leasing in the UK

2021 Overall Risk Score: 3.62

The industry performed strongly for much of the past five-years period. The industry provides services through renting and short-term operating leases of ground support equipment, aircraft and engines as well as parts. The main clients of the industry are passenger air transport operators and airports. Overall, revenue is forecast to increase at a compound annual rate of 5.2% to reach £695.2 million over the five years through 2020-21. Industry growth at the start of the period was supported by an increase in inbound tourism as the value of the pound plunged. Increased tourism benefited budget airlines in particular, which in... Learn More

10. Agricultural Insurance in the UK

2021 Overall Risk Score: 3.63

Over the past five years, operators in the Agricultural Insurance industry have struggled with poor investment returns, volatility in underwriting returns and dampened demand induced by the COVID-19 (coronavirus) outbreak. Additionally, significant damage was caused by natural disasters, particularly flooding, which raised the value of claim pay-outs. Operators have also contended with increasingly stringent regulatory requirements, such as the Solvency II directive. Due to these operating difficulties, smaller companies in the industry have chosen to phase out or end agricultural insurance to focus on higher-margin insurance markets. Industry revenue is expected to decrease at a compound annual rate of 0.1%... Learn More