Heather Ridout, a member of the Reserve Bank of Australia board and a former CEO of the Australian Industry Group, has said that Australia’s manufacturing sector has a long way to go to successfully adapt to the strong Australian dollar.
Ridout, who was CEO of the Ai Group for eight years, told the Wall Street Journal that investment in the sector continued to shrink.
"If we can see a sustained upturn in investment…we might say that we've made the adjustment, but I don't think that is necessarily apparent yet," she said.
"Manufacturing has been facing very, very strong headwinds with the currency staying high for a sustained period… The pressure to reduce costs is going to be unrelenting on the industry."
Ridout suggested that better global links needed to be created by manufacturers, and though the sector was under pressure from high costs, it was not written off, and would look quite different in the future.
"Those saying manufacturing is dead need to take a cold shower," she said.
"We can expect the next generation of manufacturing in Australia will be different, because we are dealing with a completely competitive environment."