Industry risk is measured by the strength of the industry within the economy and relative to economic trends, both locally as well as internationally. This also includes the ease or difficulty of entering the industry, the diversity of earning base and role of regulation and legislation.

The specific issues include:

• Economic importance of the industry to the country.
• Potential for support.
• Employment significance.
• Industrial relations record.
• Significance of legislation: protective and harmful, relationship with government.
• Maturity of the industry.
• International competition.
• Barriers to entry.
• Competitive situation domestically: monopoly, oligopoly, fragmentation.
• Nature of the industry: capital intensity, product lifespan, marketing requirements.
• Cyclic factors: demand, supply, implications for price volatility.
• Industry cost and revenue structure: susceptibility to energy prices, interest rate levels, government policies.
• Important developments and trends in the industry.