Top marks: Private schools, universities and language courses drive education industry growth

The education division has had some major changes in the past five years. Enrolment in private schools outpaced government school enrolment for much of the period. Strong performances by English Language Intensive Courses for Overseas Students (ELICOS) and tutoring businesses supported expansion of the language and other education industry.

However, growth in these segments has slowed since the appreciation of the Australian dollar. Tutoring businesses and universities have offered new services to expand their market base. Online education is a major development and technology is permeating all areas of education. Revenue for the division is expected to increase an annualised 2.1% over the five years through 2012-13.

Total division revenue is estimated at $102.3 billion in 2012-13, an increase of 0.6% from the previous year. Schools are the largest education sector, accounting for more than half of total revenue. The university and other higher education industry is second largest and controls over one-quarter of division revenue. As the primary contributors of division revenue, division revenue growth is highly correlated with the drivers influencing growth of these industries. Of particular importance is the level of the Australian dollar, which influences the demand of Australia’s education from international markets.

Besides economic factors, industry revenue growth is highly reliant on policymakers’ decisions. For example, the movement towards a demand-driven system in the post school education sector was introduced with the aim of producing an additional 217,000 more graduates by 2025. Depending on the focus of the present government, policy decisions will influence government funding levels and the distribution modes.

Industry at a Glance

Considering these factors, over the next five years, growth in the division will be led by the private schools industry and the university and other higher education industry. Education division revenue is forecast to expand 3.3% per annum in the five years through 2017-18 to a total of $120 billion. One of the main challenges facing education industries will be how to adapt to a significant weakening of the international student market, with overseas student enrolments forecast to decrease 5.2% in 2012-13 from the previous year.

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