Industry Analysis & Industry Trends
The Shipbuilding and Repair Services industry has grown significantly over the past five years. Revenue is expected to rise at an annualised 4.0% over the five years through 2014-15. This growth would be even stronger were it not being measured off an extremely high base year, with a massive 42.0% increase in industry revenue in 2009-10. Industry revenue growth is strongly influenced by defence expenditure and Royal Australian Navy (RAN) shipbuilding initiatives.
A major drop in capital expenditure on defence in 2012-13 did not severely affect industry operations, as existing RAN projects, primarily the Hobart-class Air Warfare Destroyers and Canberra-class Landing Helicopter Dock ships, continued to drive revenue growth... purchase to read more
Industry Report - Industry Investment Chapter
The industry displays a low level of capital intensity, and this level has remained unchanged over the past five years. In 2014-15, for every $1.00 spent as wages, an estimated $0.10 is invested in capital. Capital equipment required in the industry generally has an extended operational life and depreciates slowly over time. Additionally, depreciation expenses do not take into account lease payments made on properties and equipment hires. In an industry with highly customised products, manufacturers often prefer to hire equipment for one-off processes rather than purchasing the expensive machinery. These trends contribute to fairly low capital requirements and low depreciation costs... purchase to read more