Home Trusted by 600,000+ buyers

Local manufacturing heads for extinction: research

20 July, 2017

Australia's manufacturing level is the OECD's lowest and the long-term decline of manufacturing here is atypical among comparable countries, new research shows.

University of Queensland Institute for Social Science Research researcher Dr Jenny Povey said Australia lost 122,400 manufacturing jobs in the decade to 2015.

"The sector now accounts for only 7.1 per cent of Queensland jobs," Dr Povey said.

Manufacturing's share of national employment dropped from 30.5 per cent in 1965 to 7.8 per cent now, according to the Australian Manufacturing Workers' Union-commissioned study.

"We can no longer hope to simultaneously outsource to countries with lower production costs and keep high-skill jobs here," Dr Povey said.

"Our research illustrates the decline in Australian manufacturing output is not typical and that Australia has the lowest share of manufacturing employment of any OECD country."

Dr Povey urged Australia's federal and state governments to increase investment and intervention.

"They should learn from Germany, if Australian manufacturing is to be saved," she said.

"The German government spends AUD$3.2 billion annually funding a network of research institutes to drive innovation, and their manufacturing sector contributes 22.6 per cent of GDP, underpinned by partnerships between researchers and industry.

"The German model works to drive exports of manufactured goods and create jobs.

"Manufacturing provides skills to other industries, and its decline will result in skills shortages in other industries, therefore a shift in Australia's policy direction is required now.

"Increased public procurement is an important facet of that change, and this research supports the notion that when we can make things in Australia, we should."

Economist and Australia Institute Centre for Future Work Director Dr Jim Stanford said the study supported research undertaken by his institute last year.

"UQ's report confirms the drop in manufacturing work is not normal or inevitable," he said.

"Queensland possesses enormous assets – human, physical, and financial – which could be put to work to revitalise value-added industry.

Achieving this goal is vital if we are to preserve a society in which working families can hope to enjoy decent, stable lives."

AMWU Queensland State Secretary Rohan Webb said the research reinforced the experiences of manufacturing workers.

"As traditional manufacturing declines, businesses are shutting, people are suffering and regional communities are becoming ghost towns," Webb said.

"We need good manufacturing jobs to support our local economies and communities - and this research shows governments must intervene now."

Download the report: The future of manufacturing jobs in Queensland

Have your say...

We welcome thoughtful comments from readers
Reload characters
Type the characters you see in this box. This helps us prevent automated programs from sending spam.
John Haney | Thursday, July 20, 2017, 3:37 AM
Learning from Germany is a great start, but the scale of Australian business in relation to the European gateway that Germany has on their door step also needs to be considered. For Australia to become an automated Germany, the business has to be their to manufacture. Australia doesn't have this size of opportunity when you compare the sheer size of what Germany produces for their international export market. Manufacturing quantity in Germany vs Australian manufacturing quantity just in my industry alone is like almost 100:1. How can we invest in technologies when we don't have the volume? I am all for manufacturing in Australia to keep jobs here and from that will emerge new jobs and this will have a snow ball effect that will contribute to other jobs in other sectors in facets of sales, finance & administration groups from the on-flow of operational work production. Poising the question of how can Australia become a mass economy of scale manufacturing hub for the APAC/Oceania regions when the investment to go from one or two automated small lines at best currently to a grand scale mega factory with 95% automated lines overnight is going to take an investment of more than $40 million dollars straight away without even considering the marketing side of it to bring in customers to support the new mega factory. We still have to compete then against Germany and China who a streaks ahead of us with mature 10+ years experience in this migration and level of manufacturing. I don't know if this is a good business model to consider for longevity or will it be a money pit that will go no where within 5 years of opening. Lets get together some of our millionaires within Australia who have the resources to see if the model can work. If it works, there is a pot of gold waiting for everyone to benefit from from new infrastructure/roads/initiatives nationally, to new jobs, to new technology where the Australian minds will contribute to push Australia into the upper echelon.
Hedley | Thursday, July 20, 2017, 4:41 AM
I have just assisted an inventor to make a proto-type unit that could well be fitted to our vehicles. The engineer is very well qualified with a doctorate in his particular discipline. His invention is totally in another field. The point I make supports the good Dr in helping engineering in Australia. Without little engineering shops like our family's, where would the inventor head to have his idea developed into a proto type? I also report that general machine shop skills and knowledge of metals and heat treatment, has sharply declined around industry. So, just what is the industry going to do? Forget me, I'm fifteen years past retirement. But I would still love to pass on anything left between my ears to an interested younger mob. Apprentices? 1. Very hard to find a suitable one. 2. Very costly to train in-house. 3. The industry people that I talk to all agree with me. Back to you.