Boral Limited Industry Analysis

This assignment examines the industry and market outlook for Boral Limited, a major Australian building and construction materials company. It analyzes factors influencing the industry, including economic growth, government policies, and commodity cycles. The report also assesses Boral's financial performance and explores challenges such as inflation and low interest rates impacting investment attractiveness.

Running head: INDUSTRY AND MARKET OUTLOOK OF BORAL LIMITED
Industry and Market Outlook of Boral Limited
Name of the Student
Name of the University
Author’s Note

1INDUSTRY AND MARKET OUTLOOK OF BORAL LIMITED
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

2INDUSTRY AND MARKET OUTLOOK OF BORAL LIMITED
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 been 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).

3INDUSTRY AND MARKET OUTLOOK OF BORAL LIMITED
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:
http://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:
http://www.boral.com.au/ [Accessed 20 Oct. 2017].
cdn.aigroup.com.au. (2017). Australia’s Construction Material Industry: Profile and Outlook.
July 2015. [online] Available at:
http://cdn.aigroup.com.au/Economic_Indicators/Construction_Survey/2015/
Construction_industry_profile_and_Outlook.pdf [Accessed 20 Oct. 2017].