Which industries could take the resource industry's crown in 2016?
As the resources industry continues to decline, we're seeing a game of thrones between hopeful, capital-intensive industry usurpers.
Australia is known for many things around the world: pristine beaches, deadly wildlife and an abundance of natural resources. The latter of these has sustained our economy for decades.
As the Minerals Council of Australia explains, the resources industry is responsible for:
- $121 billion per year in economic contribution
- More than half (54 per cent) of all goods and services exported
- Almost 700,000 direct employment opportunities amounting to wages of $18 billion
However, the industry has been declining, leaving our country looking for a new jewel in its economic crown. But which industries are hoping to step in and fill the massive gap?
Game of Thrones
The Department of Industry, Innovation and Science (DIIS) recently released its Australian Industry Report for 2015, in which we get a snapshot of the sectors that could continue to grow in 2016. Much like George R.R. Martin's blockbuster science-fiction series, there are a few usurpers ready to take the throne from mining.
Professional services - Accounting for almost a quarter (23.1 per cent) of all-industry output and employing nearly a fifth of the Aussie workforce (17.2 per cent).
Trade, transport and logistics - With 771,000 employed, 6.6 per cent of the workforce are in this sector, who contribute to 6.3 per cent of all output, the sector continues to flourish.
ICT and the digital economy - More than 256,000 are employed in this growing sector, which already accounts for 2.5 per cent of our country's output.
Utilities services - Making up 2.1 per cent of output and employing 92,200, this industry also has the highest labour productivity of the four challengers.
An expensive game
One thing all businesses in these industries have in common is how capital-intensive they can be, often relying on expensive assets – specialised equipment, IT hardware and systems, office fit outs, trucks and vehicles, plant and machinery, and much more. Sustainable business finance solutions are needed to support growth in 2016 and beyond.
Encouragingly, alternate non-bank financiers like Classic Funding Group, offer a wide range of innovative funding options for businesses including Confidential Debtor Finance facilities to turn unpaid invoices into funds, Equipment Finance to acquire required assets and spread the cost over time or sale-and-leaseback finance to raise capital from existing unencumbered assets.
With the holiday season now well and truly over, now is the time for businesses to map out a financial strategy to capitalise on opportunities in 2016.
Contact the team at Classic on 1300 780 985 to discuss funding options.