There is still growth in the Services Sector.

The service industries are a major contributor to Australia’s economy. They employ approximately 2.5 million people (representing almost a quarter of Australia’s workforce), with an additional 1.7 million volunteers engaged. The contribution of the service industries to Australia’s Gross Domestic Product (GDP) for 2007/08 was AUD50.8 billion (4.9%) for wholesale trade and over AUD60.1 billion (5.8%) for the retail trade sector, almost AUD21.4 billion (2.1%) for accommodation, café and restaurants, over AUD21 billion (2%) for the personal and other services sectors, and AUD16.2 billion (1.6%) for the cultural and recreational services sectors. In 2006/07, tourism contributed over AUD38.9 billion to Australia’s GDP. Whilst the economic downturn has meant that businesses in the service industries are feeling the pinch, it has also presented opportunities for the service sectors.

Data suggests that in spite of the global financial crisis, growth is still occurring:

Between December 2007 and December 2008, ABS data for household final consumption shows an increase in retail(food,clothes, household equipment), with the exception of vehicles, which decreased 10% (ABS).
According to figures released by the ABS sales of pharmaceuticals, cosmetics and toiletries across Australia jumped to $1.2 billion in December 2008 from $974 million in November. The 24.2% rise in monthly turnover for pharmacy products followed the above mentioned general boost in retail sales across Australia. Pharmacy product sales in December last year also proved to be stronger than the same period of the previous year – a 12.6% rise from $1.1 billion recorded in December 2007.
Supermarket retailing, used good retailing and household equipment repair services are forecast to hold up well in the next months and the retail sector as a whole will begin to recover during 2009/10 according to the IBIS World Economic Briefing February 2008. Some discount retailers are aiming to take advantages of falling property prices to expand their network and to increase their market shares through targeting customers which have so far focused on more upscale products and services.
ALDI is currently building new distribution centres in Sydney and Melbourne to cope with the expected expansion, allowing it to double its outlets over the next six to seven years.
In February, retail food brand management and franchiser Retail Food Group reported a net profit rise of almost 20% for the first half of 2008-09. The company's net profit of $10.6 million for the first half was up 19% on the prior corresponding half's $8.9 million and revenue grew 39% to $69.7 million compared to first half 2007-08. Total franchise network sales across its Donut King, Brumbys Bakeries, Michels Patisserie and bbs cafe franchise systems for the half year grew to $320.9 million while total outlets increased to 1066. Chief executive Tony Alford said "Ultimately, Retail Food Group enjoys a diversified revenue base which provides strong platform for growth and increased shareholder value".
A Newspoll survey conducted in October 2008 on behalf of American Express, surveying 125 NSW (mostly Sydney) and 125 Victorian (mostly Melbourne) restaurateurs found that 68% of respondents reported an increase in the number of new customers and 80% reported more regular customers.
The current value of the Australian dollar improves the competitiveness of Australian inbound tourism compared to other destinations. It also encourages domestic tourism, as fewer Australians travel overseas, and choose to travel within Australia instead. As people are spending their holidays in Australia, domestic hotels, restaurants and tourism destination will profit.

The service industries cover a wide range of services and goods, which is beneficial in uncertain times. Whilst some industries rely on a single product, service or customer base, service industries have a diverse customer base and represent a broad range of products. Furthermore, investments in jobs in the service industries have broad effects through indirect returns. Many companies are focusing on their skills needs as Australia’s service industries continue to experience skill shortage in many areas like retail pharmacists and chefs, despite the economic downturn.

Source: Service Skills Australia

Good News Stories

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