In our second issue we look at current trends and the outlook for Australia’s manufacturing sector.
In the era of mining, Australia’s manufacturing sector is generally under-appreciated.
For a sector that attracts so much gloomy opinion, its contribution to the nation is surprisingly strong.
Consider: manufacturing today comprises approximately 8 per cent of GDP, employs almost a million people, and accounts for nearly a third of all exports. It is true that manufacturing generally is in decline, due to long-term factors like the rise of lower-cost competitors in Asia and elsewhere and short-term factors like our recently high currency, falling productivity and reputation as a high-cost economy.
Jobs, for example, continue to be lost, with 106,000 lost between 2007-08 and 2011-12 around a further 85,000 predicted to be shed by 2017-2018. But manufacturing export volumes have grown by more than 22 per cent since 2000. And there is cause for optimism if Australia’s manufacturers can play their cards right—because the continuing growth of Asia’s middle class, with its appetite for new products that their own economies cannot yet satisfy, provides an opportunity to expand our exports, especially in areas of strength, such as those related to health, machinery, chemicals, and agriculture.