Manufacturing in Australia makes a vital and significant contribution to the economy.
The sector has been growing at an average rate of 0.9% for more than a decade, employs almost 1 million people, accounts for 8.7% of GDP, and for most of our high value exports.
But, manufacturing’s relative contribution is declining. This is largely due to the higher growth rates of other sectors, especially mining and services. In line with the changing global economic landscape, this trend is observed across most other advanced economies.
Importantly, there is also evidence that manufacturing has a multiplier effect on the rest of the economy by driving jobs, investments and sales in other sectors.
It is a stark reality that Australian manufacturers will continue to be pressured by a more intensified competitive environment – from low cost manufacturing economies, the strong Australian dollar, import penetration, the softening of domestic demand, rising input costs, narrowing profit margins and increasing social and environmental
expectations.
Read the full Manufacturing futures paper by the Australian Business Foundation here.