Industry and Market Outlook of Boral Limited †Free Samples

Question: Discuss about the Industry and Market Outlook of Boral Limited. Answer: Industry and Market Outlook Boral Limited is one of the major Australia multinational companies involved in the business of building and construction materials. The company was established in the year of 1946 and the headquarter of the company is at North Sydney, Australia (boral.com.au 2017). Thus, it can be seen that Boral Limited operates in the building and construction materials. In this context, it needs to be mentioned that this particular industry is becoming a major industry in Australia due to its economic contribution towards the Australian economy (cdn.aigroup.com.au 2017). This particular industry is considered as the third largest industry in Australia that has contributed around 8% towards the Australian gross domestic product (GDP). In Australia, demand of the building and construction materials industry is driven by some of the major factors; they are growth of the population, growth in income, changes in technology, industry activity, consumer sentiment, commodity cycle, and rate of interest, inflation and others. Apart from these, various policies introduced by the government affect the economic contribution of this industry. It is important to mention that a large upstream and downstream supply chain is involved with the Australian building and construction materials industry. Due to the fall in mining related construction and infrastructure investments, it is expected that the current downturn in this industry will be continued. However, it is also expected that the residential contraction activities will become stronger in the coming years giving the necessary boost to this industry (cdn.aigroup.com.au 2017). It can be seen in the recent years that Boral Limited has been able to register impressive amount of profit in the recent years. In the year 2014, with the help to large variety of products, Boral Limited registered $5.2 billion of sales along with $294 million of earnings before interest and tax (EBIT). In the financial year 2015-16, there was a 9% rise in the after tax net profit of the company that is $268 million. Thus, from all these financial figures, it can be observed that Boral Limited has been able to take full advantage of the good economic condition of constriction materials industry of Australia. Considering the current business trend of Boral Limited, it has been forecasted that the company will be able to increase its earnings by 58% in the upcoming financial years (abs.gov.au 2017). Here, a fact for concern is the presence of some factors that has been affecting the attractiveness of investments of Boral Limited. One such factor is inflation rate. High inflation has b een affecting the Australian economy over the years. Due to this inflation rate, investors become less interested in the construction material sector of Australia. In addition, the low rate of interest is another hindrance for Boral Limited to increase their investment attractiveness. As the world economic downturn affects Australian economy, companies become unable to offer high rate of interests on investments to the investors. The same aspect is applicable for Boral Limited as the company is not able to provide high rate of interest on investments to their investors (abix.com.au 2017). References Abix.com.au. (2017).BUILDING MATERIALS INDUSTRY AUSTRALIA ABIX. [online] Available at: https://abix.com.au/tag/building-materials-industry-australia/ [Accessed 20 Oct. 2017]. Abs.gov.au. (2017).8752.0 - Building Activity, Australia, Jun 2017. [online] Available at: https://www.abs.gov.au/ausstats/abs@.nsf/0/4FB5ACFC0074529ECA2576B00017C434?Opendocument [Accessed 20 Oct. 2017]. Boral.com.au. (2017).Building Construction Materials Boral. [online] Available at: https://www.boral.com.au/ [Accessed 20 Oct. 2017]. cdn.aigroup.com.au. (2017).Australias Construction Material Industry: Profile and Outlook. July 2015. [online] Available at: https://cdn.aigroup.com.au/Economic_Indicators/Construction_Survey/2015/Construction_industry_profile_and_Outlook.pdf [Accessed 20 Oct. 2017].