Treasury modelling released yesterday has painted a pretty bleak picture of certain Australian manufacturing sectors in 2020, with car manufacturing and component-making expected to decline 39%; however, the steel industry has been pitched to grow 10%, which is a positive result after so much bad news in the sector.
Of great concern is the expectation that our hard-fighting textiles, clothing and footwear sector (TCF) is likely to be down 34%, however this probably won’t come as a surprise to those involved in the sector.
The Aussie manufacturing industry all up is still expected to grow though, by 5% on 2011 levels, which is good news for an industry that’s been told it might not be around in 10 years.
The steel sector is the biggest dark horse in the modelling report, expected to grow 10% by 2020. This suggests last month’s 1,400 redundancies in the steel sector could allow it to stop, reassess the situation, and reboot for growth.
It also suggests the pressures of the carbon tax and electricity prices, and cheap overseas imports, and the high Australian dollar, won’t be such unsurmountable obstacles in the future.
Not surprisingly, the mining sector will flourish, with modelling on the government’s carbon pricing package predicting the resources sector to grow a whopping 77% by 2020.
That includes rises in coal mining (45%), gas (100%), iron ore (104%), and non-ferrous ore (92%).
Manufacturing and agricultural skills are expected to migrate to the resources, services and construction sectors, which all show positive growth in the Treasury modelling.
All up, things are looking up for the Aussie economy, regardless of speculation that we’re heading into another recession.
"The economy continues to grow strongly under a carbon price, with real gross national income per person growing at an average rate of 1.1 per cent to 2050," said Treasurer Wayne Swan.