Industries set to fly in 2015

12 January, 2015

As Australian companies enter the new year, business information analysts reveal the industries expected to soar.

2015 should be a boom year for a wide array of industries. Coal seam gas extraction will provide the benchmark for others to chase, with private equity and hydroponic crop farming also expected to soar in the coming year.

Coal seam gas

The coal seam gas extraction industry is currently undergoing a significant transformation.

Industry revenue is forecast to rise by 148.0 per cent over the next year, to reach $1.83 billion. While coal seam gas projects have become more viable due to new and improving extraction techniques, it is the development of export capabilities that is expected to drive rapid industry growth.

"The opening of the domestic east coast gas market to the international market is expected to push gas prices higher – particularly as Australia is well-positioned to meet strong demand from Japan, China and South Korea, which are the world's three largest natural gas importers," IBISWorld senior industry analyst David Whytcross, said.

Supply to these markets from considerable coal seam reserves in Queensland will be boosted in 2015 as the Curtis Island LNG plant becomes operational.

"Once operational, the Curtis Island LNG plant will be the world's first project to turn coal seam gas into liquefied natural gas, which will be a boon to operators of newly developed coal seam gas fields in the Cooper Basin," Whytcross said.

Private equity

2014 was a highly successful year for the private equity industry, which is expected to achieve similar prosperity in 2015. Private equity firms generate revenue from management fees paid by outside investors and the gains made on investing their own funds.

Whytcross noted that merger and acquisition (M&A) activity is expected to rise in 2015. As private equity firms will play a key role in upcoming M&A deals, this should result in growth in management fees earned and potential investment returns, ultimately leading to forecast industry revenue growth of 10.1 per cent for the year.

"Growth in M&A activity in Australia coincides with greater global interest in M&A, as Europe and particularly the United States are emerging from a prolonged period of crisis and subdued growth," Whytcross said.

Hydroponic crop farming

Hydroponic crop farming holds a relatively small place in the overall scheme of Australian agricultural production, but is undergoing strong and steady growth.

Water conservation is the driving force behind hydroponics, as hydroponically grown produce typically uses only one-fifth the amount of water that soil-grown produce requires.

"In addition to water conservation, hydroponics allow for higher production yields of high-quality produce," said Whytcross.

"Vertically tiered plants enable greater productivity, while greater quality control, faster plant growth and longer growing seasons offset the added cost of hydroponic systems over conventional agricultural practices."

According to Whytcross, rising capacity in the hydroponic crop farming industry will meet sustained demand from retailers and consumers in 2015, and lead to revenue growth of a forecast 5.6 per cent for the year.