There’s cautious optimism around that manufacturing’s fortunes have changed. Brent Balinski spoke to Jens Goennemann and Andrew Stevens of the Advanced Manufacturing Growth Centre about building on successes and – hopefully – lifting the national psyche around the industry.
With plenty of bad economic news in the last half a year, the month-on-month growth results for the industry should stand out.
The occasional, cautiously optimistic stories on manufacturing make their way into the popular press, but an overall narrative of the industry “bucking the trend” perhaps isn’t obvious.
“Everyone’s focussed on the declines in the resources industry, but the manufacturing sector has actually been quite strong in terms of revenue growth and in terms of employment,” Andrew Stevens, chair of the Advanced Manufacturing Growth Centre, told Manufacturers’ Monthly.
At the time of writing there have been six straight over-50 results in the Australian Industry Group PMI – the best streak since 2010.
There are isolated reports, however, suggesting that the right kinds of companies are enjoying success.
“…High-tech, high-value manufacturing is booming," an Ai Group spokesman told The Australian Financial Review late last year.
Jens Goennemann, who finished as managing director of Airbus Group Australia Pacific last year after 20 years at the aerospace group, is keenly aware that smart stuff can be made here.
“I can only say with satisfaction and pride about what my team has accomplished not only being the furthest away from the European headquarters yet assembling and delivering double-digit numbers of helicopters to the Australian customer in the previous two years. I think that is still unmatched in the entire Airbus Helicopters world,” he told Manufacturers’ Monthly.
“We have been able to deliver highly-sophisticated equipment in Australia at the same time I was sadly seeing other manufacturing sectors, in the more traditional sense, decline. And I could get a really good taste of what’s possible in Australia.”
Goennemann begins today as managing director of the Advanced Manufacturing Growth Centre. At the top of its priorities is helping get local manufacturers more exposure to the opportunities within global supply chains and international markets, in the defence and aerospace sector and elsewhere.
Based on early-stage consultations by the AMGC with leaders from 80 of the leading Australian manufacturers, the top issue identified in terms of growth was access to these.
Another goal for the group is to help change the national psyche around manufacturing.
Those in the industry will happily acknowledge that manufacturing still employs close to a million Australians, contributes a significant (and undervalued, with deep connections to other sectors) amount to GDP, and is the leading private sector contributor to R&D spending. However, they would probably agree that Australia, on the whole, does a lousy job of celebrating our industry success stories.
The poor (though recently somewhat improved) state of investment in the sector and the attraction of talent to it could be helped if there was more recognition of the country’s many world-class manufacturers. Again, it is an issue of highlighting successes, which are frequently overlooked in general.
“Very similar to the Airbus example that Jens talked about, you see the success of Airbus, and we have talked about Australian Turntables, you and I have talked about ANCA and Sutton Tools and Cochlear and ResMed and all those others,” said Stevens.
“If they were all twice the size and we had twice as many and we had a groundswell of support saying ‘Gee, our manufacturing industry is in a resurgent state’, then the whole environment generally, for all manufacturers in Australia would be improved.”
Fixing the national psyche will be a result of adding to and promoting success.
The growth centre’s next step is to attract more members (see here for an overview of its operating model) and detailed studies of two or three global value chains as part of competitiveness plan to be finished by July.
“Rather than us getting to industry code and who’s in and who’s out, we want to study all of the participants in and around a particular value chain, because we can learn more than we can learn from just one, because we have a very detailed composite view,” added Stevens.
The challenge ahead in helping Australian companies engage globally, and helping shift the focus on what’s possible for manufacturing here, was something exciting, said Goennemann. He knows and has seen up-close the world-class innovation that exists here.
“There are companies who have delivered and continue to deliver not only to the Australian programs by the global programs of Airbus, which are Australian-based, internationally-competitive on their own merits and not just because we had to engage an Australian supplier,” he said.
“So there are great examples of success stories which I have seen and I am pretty sure there will be other successes to come.”