Manufacturing in Australia

Posted by Nabin Shaw on January 16th, 2019

The manufacturing industry is in its recession stage in Australia. The contribution of the sector has drastically lowered by a high percentage. It now contributes to 10% of Gross Domestic Product.

In earlier years before 1960, the industry was in the boom stage contributing over 20% of the Gross Domestic Product. However, in 1960, the industry started stagnating, and significant manufacturer companies began to withdraw from the manufacturing sector.

However, recent reports have stated that the manufacturing industry is in the transition stage and the future is promising. With many suppliers supplying hoisting and lifting equipment for the manufacturing industry, the trend in the sector might change positively.

The major manufacturers include food processing industry, motor vehicle industry, and textile industry. In the past few years, major companies in these industries have closed down. The country, in turn, is heavily relying on imports from other countries.

The impact of the recession stage in manufacturing industries

1) Unemployment

With the closure of major manufacturing companies such as Pacific Brands and South Pacific Tyres many people have lost their jobs. Unemployment has led to a lower standard of living in the affected areas. It has led to increase in crimes due to lack of employment.

A large number of unemployed people can not be fully absorbed in other industries. With the closure of more than ten manufacturing companies, the employment rate is quite high.

2) Increase in imports

The country is now heavily relying on imports of manufactured products. It is an additional cost for the country. Previously manufactured products are now being bought in other countries at high prices.

3) Lost of investor companies

International companies such as Holden, Bridgestone, among others are no longer conducting manufacturing in the state. They have withdrawn their activities consequently leading to increased unemployment and lower revenues for the government.

4) unstable economic conditions

The manufacturing industry contributed to over 20% of the Gross Domestic Product. However it now only adds to less than 10%. It is a significant shift in the income of the country leading to unstable economic conditions.

Is the future of manufacturing industry foreseeable?

The future is a bit promising though not assured. The industry is undergoing significant changes to transform the industry. The government is aiming to recover the glory of the industry as it was before 1960.

The industry is not entirely outdated and can be recovered. However, convincing international manufacturers to reinvest in an industry that has drastically failed over the last 58 years is a big task.

If the industry can be recovered, it will be beneficial to the country. It will help create more jobs, cut on imports, establish a favorable economic condition and attraction of major investors.

Bottom Line

The manufacturing sector is an essential sector in the market. A country heavily relies on manufactured products. So a booming manufacturing sector is suitable for the country's economic conditions.

Despite the significant failure in the manufacturing industry in Australia, the government is determined to reinstate the sector. Closure of vital industries both locally and internationally has heavily contributed to the fall in the sector.

The future of the industry should be promising and attract significant investors. The recovery of the sector is hopeful.