INDUSTRY ANALYSIS

FEATURED SERIES

The estimates in this issue cover the performance of selected industries compiled from the annual Economic Activity Survey (EAS) and from Business Activity Statement (BAS) data reported to the Australian Taxation Office (ATO). The estimates are expressed in current prices. Employment is reported at the end of June 2017. For more information on the scope and coverage of the collection for Australian Industry, 2016-17, please refer to the Explanatory Notes.

The estimates are not adjusted for situations where businesses report to the ABS on an off-June reporting year and can be impacted by price fluctuations. This particularly impacts on estimates for the Mining industry where reporting largely reflects the calendar year 2016. For estimates adjusted to a June financial year basis, see the 'Off-June adjusted estimates by subdivision' data cube. For more information about the impact of off-June reporting on estimates, see the Technical note on Off-June Year adjusted estimates in this issue.


KEY INDUSTRY DATA OVER TIME

The following graph shows each industry division and its contribution to key data items over the time period of 2006-07 to 2016-17.




INDIVIDUAL INDUSTRY TIME SERIES ANZSIC DIVISIONS A TO J

The following graphs show the annual time series from 2006-07 to 2016-17 for ANZSIC Divisions A to J for key data items.






Division A Agriculture, forestry and fishing

The Agriculture, forestry and fishing industry experienced very strong growth in 2016-17 across most key data items, in particular EBITDA at 22.9% ($4.4b). This was dominated by the Agriculture subdivision, with sales and service income up 8.7% driven largely by record grain production levels. The value of wheat produced grew 19.4% in 2016-17, a reflection of the increased volumes of wheat. The Agriculture, forestry and fishing support services subdivision also contributed to growth, with a 15.6% rise in sales and service income. This subdivision includes sheep shearing and cotton ginning services, which benefitted from the increased value of wool and cotton lint produced in 2016-17.


Division B Mining

The Mining industry experienced strong growth in 2016-17 across all key data items except employment and wages, buoyed by higher prices across a number of key commodities. This was driven in particular by the Coal mining and Metal ore mining subdivisions, which made the largest contribution to sales and service income growth. The Export Price Index for Coal mining grew 61.5% in 2016-17, while the index for Metal ore mining grew 22.4%. EBITDA for the Mining industry grew 38.2% ($23.1b), driven by sales and service income growth of 13.4% ($25.5b). Employment and wages both declined for the third year running.

For more detailed financial performance information on the Mining industry please refer to the 'Mining operations' data cube on the Downloads page.


Division C Manufacturing

The Manufacturing industry continued its contraction, which was reflected in a fifth consecutive annual decline in sales and service income. The fall of 2.3% in 2016-17 was a stark contrast to the average growth of 3.6% in sales and service income across Total selected industries. The Basic chemical and chemical product manufacturing subdivision was the largest driver of these indicators with a 12.8% (-$4.1b) decline in sales and services income and a 19.6% (-$878m) decline in EBITDA. Petroleum and coal product manufacturing further contributed to the contraction with at 16.7% decline in sales and services income (-$2.6b) driving the 14.1% decline in EBITDA (-$196m). The estimates for this subdivision are strongly influenced by calendar year reporting, and therefore this decline was heavily impacted by the fall in global crude oil prices during the 2016 calendar year, which flowed through to a 14.0% fall in the Output Producer Price Index for Petroleum refining and petroleum fuel manufacturing. Offsetting these declines was Machinery and equipment product manufacturing which recorded growth in EBITDA of 9.7% ($334m) driven by a 3.4% ($1.1b) increase in sales and services income.

For ANZSIC class level information on the Manufacturing industry please refer to the 'Manufacturing industry' data cube on the Downloads page.


Division D Electricity, gas, water and waste services

The Electricity, gas, water and waste services industry experienced strong growth across all key data items during 2016-17 other than employment, which was flat. This growth was largely driven by increases in electricity prices. Electricity supply accounts for more than half the activity in this division. Constraints to electricity supply resulted in volatility in the wholesale market and strong increases in the prices passed on to customers. This was influenced by a range of factors including a major weather event that impacted the supply of electricity in the National Electricity Market (NEM). Over the financial year, the Consumer Price Index for electricity increased by 12.5% for Adelaide, 10.5% for Sydney, 3.0% for Melbourne and 6.2% at the total Australia level.


Division E Construction

The Construction industry recorded flat EBITDA (-0.1%), the result of strong growth in Building construction (15.0%, $1.8b) offset by a strong decline in Heavy and civil engineering construction (-8.5%, -$293m) and Construction services (-5.9%, -$1.6b). Continued growth in Australia's population, reflected in the 1.6% increase in the Estimated Resident Population in the year to June 2017, has driven the demand for housing. The value of building work done increased 3.7% in 2016-17 compared to the previous year, while the value of engineering construction work done declined 8.3% over the same period.


Division F Wholesale trade

The Wholesale trade industry showed moderate growth across all indicators with EBITDA increasing by 3.3% ($591m) and sales and service income by 4.9% ($23.6b). This growth was mainly driven by the subdivisions Machinery and equipment wholesaling, which recorded 21.4% ($887m) increase in EBITDA, and Commission-based wholesaling (64.7% or $334m), offset by Basic material wholesaling, which declined 20.2% (-$1.0b). Investment in the Wholesale trade industry declined in 2016-17, with total capital expenditure down 4.2% and gross fixed capital formation declining 20.6% compared to 2015-16.


Division G Retail trade

The Retail trade industry also showed moderate growth across key indicators in 2016-17, with EBITDA up 3.3% ($743m), despite slowing sales and service income growth (2.7% compared to 5.0% in the previous year), as purchases of goods and materials also slowed (2.5% compared to 5.5%). The Food retailing subdivision EBITDA stabilised at 0.4% ($31m) after a big drop of 10.7% (-$859m) in 2015-16. The largest subdivision, Other store-based retailing, contributed the most to growth with 8.0% ($819m). The Non-store retailing and retail commission-based buying and/or selling subdivision, which includes retailers operating only in the online space, grew 4.1%, and Fuel retailing increased 6.2%.


Division H Accommodation and food services

The Accommodation and food services industry experienced a moderate 3.3% ($3.1b) increase in sales and service income but showed a 8.7% (-$948m) decline in EBITDA. This was the result of a larger than usual increase in outsourcing costs to contractors as shown in other selected expenses, which increased 7.0% ($1.8b). Food and beverage services dominated this division, accounting for over 80% of sales and service income, and driving the movement in both sales and service income and EBITDA.


Division I Transport, postal and warehousing

The Transport, postal and warehousing industry exhibited moderate growth in 2016-17 with sales and service income growing by 2.6% ($4.1b) and EBITDA by 2.7% ($826m). This diverse industry is by its nature strongly impacted by the performance of other industries and their demand for transport services. The growth in both sales and service income and EBITDA was driven by the Transport support services subdivision, where sales and service income and EBITDA rose 6.0% ($2.4b) and 20.7% ($2.1b) respectively. This reflected increased demand for the services provided by airports, toll-roads and infrastructure. This was offset by a decline in Road transport, which recorded decreases 0.4% (-$200m) in sales and service income and 11.8% (-$1.1b) in EBITDA. This industry has low barriers to entry which has created strong competition.


Division J Information media and telecommunications

The Information media and telecommunications industry experienced a 3.4% decline in EBITDA (-$676m) in 2016-17, while sales and service income grew 1.9% ($1.5b). The contribution by subdivisions to this growth reflected the rapidly changing nature of this industry, moving from traditional telecommunications and broadcast media to internet or cloud-based services such as streaming video on demand. The Telecommunications services subdivision dominates this industry and was one of the main drivers for both of these indicators, recording a rise of 2.4% ($1.0b) in sales and service income but a fall of 3.8% (-$512m) in EBITDA. This was driven by a rise in contractor and other costs as shown by the 9.2% ($1.6b) increase in other selected expenses.

Also contributing to the fall in EBITDA were Publishing (except internet and music publishing) and Broadcasting (except internet) with falls of 48.1% (-$576m) and 16.3% (-$449m) respectively. Internet service providers, web search portals and data processing services experienced very strong growth in sales and service income with 13.3% ($874m) and EBITDA with 33.9% ($434m). The Information media and telecommunications industry made the biggest positive contribution to growth in GFCF of all industries with an 18.3% ($2.2b) increase.


INDIVIDUAL INDUSTRY TIME SERIES ANZSIC DIVISIONS L TO S

The following graphs show the annual time series from 2006-07 to 2016-17 for ANZSIC Divisions L to S for key data items.






Division L Rental, hiring and real estate services

The Rental, hiring and real estate services industry showed moderate growth across key indicators with sales and service income increasing by 3.8% ($4.8b) and EBITDA by 6.4% ($3.5b). OPBT for this industry grew 11.7% ($7.5b), largely influenced by the 9.3% ($2.6b) growth in other income, which includes the impact of asset revaluation and realised gains/losses on disposal of assets. The Property operators and real estate services subdivision accounted for the bulk of the industry's activity with growth of 6.1% ($2.9b) in EBITDA in 2016-17. Rental and hiring services (except real estate) displayed growth of 8.2% ($551m) in EBITDA.

For more detailed financial and performance information on the Rental, hiring and real estate services industry please refer to the 'Rental, hiring and real estate services' page in this issue and the associated data cube on the Downloads page.


Division M Professional, scientific and technical services

Businesses in the Professional, scientific and technical services industry provide a wide range of services to the rest of the economy, including information technology, engineering, accounting, legal and consulting services. This industry experienced strong growth for most indicators in 2016-17, due to business and government demand for professional services such as consulting and IT development, as well as new investment in infrastructure projects. Sales and service income increased 6.6% ($13.1b) and EBITDA rose 9.1% ($2.3b).


Division N Administrative and support services

The businesses in the Administrative and support services industry provide a range of routine support services to the rest of the economy, including employment services (employment placement and labour supply) as well as travel agencies and other administrative and support services. This industry experienced moderate growth for most indicators in 2016-17, with sales and service income up 4.1% ($3.4b) and EBITDA rising 11.3% ($734m).

For more detailed financial and performance information on the Administrative and support services industry please refer to the 'Administrative and support services' page in this issue and the associated data cube on the Downloads page.


Division Q Health care and social assistance (private)

The private sector Health care and social assistance industry continued to grow across almost all key indicators in 2016-17, including 3.8% ($3.4b) for sales and service income and 4.1% ($939m) for EBITDA. This was in line with increasing demand for its services from an ageing population. This trend can be seen in annual population growth for those aged over 65, which has been growing at more than twice the rate of the rest of the Australian population and in June 2017 made up 15.4% of the total Estimated Resident Population, compared to 14.4% just four years earlier in 2013. Social assistance services and Medical and other health care services subdivisions had the strongest growth in sales and service income, with growth of 9.9% ($1.1b) and 1.7% ($948m) respectively.