Car Salesmen A Bunch Of Lemons In 2009

Sydney Morning Herald

Tuesday January 6, 2009

Jessica Irvine Economics Writer

CAR salesmen, real estate agents and investment bankers are among the unlucky workers in Australia's top 10 most vulnerable industries for 2009, according to a new report by research house IBISWorld.

Companies catering towards the luxury product and service markets are also expected to feel the heat, including boatmaking, catering, international airlines and prawn fishing.

Analysts ranked 500 separate industries on a scale of one to 10 to identify those most at risk of suffering a downturn in revenue.

"Seafood and prawns are viewed as discretionary items people will forgo in the face of lower incomes and rising unemployment," according to the general manager of IBISWorld Australia, Robert Bryant.

Meanwhile, the prospect of the new year has done little to revive confidence among company executives, according to a survey of 1200 company executives released today by the credit ratings agency Dun and Bradstreet.

More than half of executives expect lower sales this year compared to last. As the jobs squeeze begins, one in five expect to have fewer staff come March than they did at the same time last year.

The chief executive of Dun and Bradstreet, Christine Christian, said falling interest rates, government spending and the post-Christmas sales boost would help. "However, regardless of the outcome of these measures, business activity will remain depressed in 2009."

The IBISWorld survey found the car industry will be hardest hit by the economic downturn, as dwindling demand for new cars adds to the financing headaches created by the exit of the two largest car financiers, GE Money and GMAC, last month. Tyre manufacturers would feel the most pain, according to Mr Bryant. "Replacement tyres will suffer most as people put off changing tyres for as long as possible to either save the money or spend it on 'essentials'," he said.

Falling house prices are also expected to keep the real estate industry on ice, with agents making fewer sales and at lower prices, eating into commissions.

"Despite falling interest rates and the extended first homeowners' grant Australians will, by and large, put off buying property in 2009," Mr Bryant said, tipping house prices would fall this year.

A lack of new home building would also see work dry up for brick layers.

The safest industries in 2009 are expected to be those related to aged or health care.

Nursing homes are expected to experience a mini boom, thanks to a growing army of over-70s and government funding.

"The fact we'll be less wealthy and increasingly time-poor in 2009 will also encourage more children to put their parents into homes rather than attempt to look after them at home," Mr Bryant predicted.

Veterinary services are also expected to remain in high demand, thanks to Australia's relatively high rate of pet ownership. "Looking after pets is an emotional expense, which means most people are willing to sacrifice something else to seek treatment for their pets during difficult times."

The report also identifies a few surprise safe haven industries including child care and cosmetics. "Although they might seem discretionary in nature, cosmetics are a luxury consumers are reluctant to give up, even in times of economic distress."

RISKY BUSINESSES

1 Tyre manufacturing

2 Car retailing

3 International airlines

4 Real estate agents

5 Boatbuilding

6 Silver, lead and zinc ore mining

7 Investment banking and securities brokerage

8 Bricklaying

9 Catering and food service contractors

10 Prawn fishing

© 2009 Sydney Morning Herald

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