Industry Glossary
Glossary of IBISWorld terms found throughout industry reports.
IBISWorld provides industry research reports on thousands of industries. Each report has the same easy-to-read format.
Glossary of IBISWorld terms found throughout industry reports.
IBISWorld provides industry research reports on thousands of industries. Each report has the same easy-to-read format.
The Barriers to Entry section outlines factors that can prevent a new company from entering the industry. This section also gives an indication of the extent to which this occurs and what constitutes those barriers. Common barriers to entry include high entry costs, government legislation and control of scarce inputs by companies already entrenched in the industry.
Capital/labor intensity is an indicator of how much capital is used in production as opposed to labor. The level is stated as high, medium or low. High is a ratio of less than $3 in wages for every $1 in depreciation; medium is $3 to $8 in wages for every $1 in depreciation; and low is more than $8 of wages for every $1 of depreciation.
The dollar figures in the Key Statistics table, including forecasts, are adjusted for inflation using the current year as the base year. This removes the impact of changes in the purchasing power of the dollar, leaving only the 'real' growth or decline in industry metrics. The inflation adjustments in IBISWorld's reports are made using the US Bureau of Economic Analysis' implicit GDP price deflator.
The Demand Determinants section identifies the factors that stimulate (or reduce) demand for products and services for this industry. Possible factors include the development of new products, levels of economic growth, government regulations and more.
Our reports may refer to the industry’s division, which is the broader group of similar industries (e.g. the construction division includes all related industries — everything from House Construction to Insulation Services).
Domestic demand is a measure of total consumption of goods and services within this country. This figure is calculated by adding imports to domestic production, then subtracting exports.
Employment represents the number of working proprietors, partners, permanent, part-time, temporary and casual employees, and managerial and executive employees working for an establishment during the last pay period in the financial year. Employees absent on paid or prepaid leave are included. Sole proprietors and partnerships that do not employ others are excluded.
An enterprise is a division that is separately managed and keeps management accounts. It consists of one or more establishments.
The establishment is the smallest type of accounting unit within an enterprise and controls its own productive activity. It consists, in most industries, of one or more locations in a state or territory.
Exports represent the total sales and transfers of goods produced by an establishment (or for it on commission) that are sold outside this country by the business or its agent.
Imports of goods and services represent the value of goods purchased from a company in another country and the amount payable to non-residents for the provision of services to residents. This represents the value of goods and services sent to other countries from this country.
IBISWorld bases concentration on the top four firms. Concentration is identified as high, medium or low. High means the top four players account for over 70% of industry revenue; medium means they account for 40% to 70% of revenue; and low means that they account for less than 40%.
Industry revenue (sometimes called ‘turnover’) describes the total sales revenue of the industry. It includes sales of goods and services (exclusive of excise and sales tax), whether produced by the establishment or not; transfers of goods to other establishments of the same business; bounties and subsidies on production; all other operating income from outside the establishment (such as commission income, repair and service income, and rent, leasing and hiring income); capital work done by rental or lease. Receipts from interest royalties, dividends and the sale of fixed tangible assets are excluded.
Industry value added is also called 'industry gross product'. This figure describes the market value of goods and services produced by an industry minus the cost of goods and services used by the industry in the productive process, which leaves the gross product of the industry (also called 'value added'). GDP is obtained by adding the gross product of all industries. This figure is calculated thus: revenue plus the increase (or less the decrease) in the value of stocks, minus purchases, transfers in and selected expenses.
All industries travel through periods of growth, maturity and decline. The Industry Life Cycle section of our industry research reports describes the industry’s current stage of development and explains why it is in that stage.
This section identifies an industry's top companies by market share, which is calculated by the company's revenue within the industry as a percentage of the industry revenue. A major player may be a legal entity and is the ultimate entity in that country (e.g. BHP is a player, not BHP Steel).
The Market Share Concentration section discusses the dominance of the top players in an industry as a key indicator for industry concentration. To ensure consistency in the database, IBISWorld bases concentration on the market dominance of the top four players.
A business with no paid employees and payroll is known as a non-employing establishment. This type of company is mostly set up by self-employed individuals.
Other players may be significant players within a product segment, a niche player, or a new player who is likely to become a major player quickly.
The level of volatility is determined by the percentage change in revenue over the past five years. Volatility levels: very high is greater than ±20%; high volatility is between ±10% and ±20%; moderate volatility is between ±3% and ±10%, and low volatility is less than ±3%.