Australian manufacturing OECD’s lowest – research

Australia

The level of Australia’s manufacturing output is at the Organisation for Economic Co-operation and Development’s lowest, new research has found.

A “long-term decline” of the industry is “atypical among comparable countries”, according to Dr Jenny Povey of the University of Queensland (UQ) Institute for Social Science Research.

“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.”

The study, which was commissioned by the Australian Manufacturing Workers’ Union, shows that national employment dropped from 30.5 per cent in 1965 to 7.8 per cent at present.

Read: Calls for caution after 40,000 manufacturing jobs boost in Australia

While there has been growth of jobs in the last financial year, research shows that Australia had lost 122,400 manufacturing jobs in the decade to 2015.

In response to these statistics, 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.

centre-for-future-work-economist-jim-stanford
Dr Jim Stanford

“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.”

Dr Jim Stanford, economist and director of the Australia Institute Centre for Future Work, 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.”