Oil and gas set to lead growth in 2015/16

Oil and gas platform in offshore or Offshore construction, Exploration and production oil and gas industry.

(Australian Associated Press)

Oil and gas, childcare services and beef farming are tipped to be Australia’s leading growth sectors in 2015/16, according to business information analysts IBISWorld.

But while they surge ahead, credit unions, banks and ceramic product makers are expected to battle falling revenues.

Growing demand from Asian markets, especially Japan, is expected to be a big revenue driver for Australia’s liquefied natural gas (LNG) sector.

Japanese energy suppliers converted to gas-fired plants after the Fukushima nuclear disaster in 2011.

IBISWorld says Australian LNG producers are well positioned to meet the soaring demand as production and export capabilities rise.

Natural gas projects off the coast of Western Australia – Gorgon, Wheatstone and Prelude – and Queensland’s Gladstone LNG project are driving production growth.

“In conjunction with growing production, selling LNG at global prices, rather than the cheaper domestic prices, will provide an additional boost to industry,” IBISWorld senior industry analyst Ryan Lin said on Tuesday.

Elsewhere, childcare is expected to benefit from more women joining the workforce and strong government support for care providers.

An increase in dual-income families is also expected to result in more children being enrolled in childcare.

In the agriculture sector, strong overseas demand for Australian beef and higher prices should help boost revenues and offset the impact of a forecast decline in live exports to Indonesia as it imposes stricter import quotas.

On the flip side, ceramic product makers are expected to lead the industries experiencing revenue falls.

GWA Group, formerly the industry’s largest player, has moved its manufacturing operations offshore, and no Australian manufacturers are expected to fill the gap.

GWA sells the Caroma and Dorf brands of sanitary and bathroom ware.

“While GWA Group’s shift to offshore manufacturing is the most significant factor in the industry’s decline, sales of locally manufactured refractory and specialist ceramic products are also expected to take a hit in 2015/16, as demand from the iron smelting and steel manufacturing industry continues to dwindle,” Mr Lin said.

Meanwhile, historically low interest rates are expected to result in significantly lower revenues for credit unions, and national and regional commercial banks.

Revenue generated by credit unions and banks depends on the size of their lending books and the interest they receive from those loans.

Although the credit unions and commercial banks have increased their activity in the residential property market, the lower interest from loans could eat into revenue.


* Oil and gas extraction, revenue to grow by 12.8%

* Child care services, revenue growth of 12.2%

* Beef cattle farming, revenue growth of 11%

* Funds management, revenue growth of 10.6%

* Data centres, revenue growth of 9.9%


* Ceramic product manufacturing, revenue to fall 11.6%

* Credit unions, revenue to fall 7.8%

* Commercial banks, revenue to fall 6.9%

* Site preparation services, revenue to fall 6.9%

* Machinery and scaffolding rental, revenue to fall 6.6%


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