What: This week's release by The Australian Bureau of Statistics (ABS) of annual industry data provides key insights for investors into how their portfolio should be positioned.
So what: The report shows that in 2012-13 the mining and manufacturing industries led the decline in profits however double digit falls were also recorded in professional services, technical services, and construction.
A review of the performance of leading companies across these industries over the past two years highlights the forward looking nature of the stock market. Firms including Bradken Limited (ASX: BKN), Worleyparsons Limited (ASX: WOR), Transfield Services Limited (ASX: TSE) have all experienced significant share price falls.
Now what: The report also highlighted industries including information media, telecommunications, fishing and real estate which far from experiencing a downturn, registered double digit profit growth in 2012-13. Once again, a check of some industry leaders in these fields such as Telstra Corporation Ltd (ASX: TLS), Tassal Group Limited (ASX: TGR) and Mirvac Group (ASX: MGR) shows these companies experienced strong gains over the past two years.
There are at least two important takeaways from the report. Firstly, investors can see where the industry tailwinds and headwinds have been. However the insights drawn from the data need to be about the future not the past, as the stockmarket is forward looking. The industries which have been the biggest underperformers are likely in due course to be the biggest outperformers – the question is when?
