Dying or just changing? Future of Australian manufacturing uncertain
Since the Chinese economy started slowing down, uncertainty has been brewing in Australia’s manufacturing sector, Business Review Australia has reported. While Australia appears to have escaped the global economic crisis relatively unscathed - compared to other countries, at least - the manufacturing sector has been hardest hit by China’s decelerating economy.
“While the decline of the Australian dollar and the lowering of interest rates in May are welcome news for Australian manufacturers, they are not enough to help them overcome the increasingly challenging business environment, both locally and internationally,” the publication reported.
In the 1960s, manufacturing accounted for around 25% of Australia’s gross domestic product; currently, it stands at around 7%.
The Australian manufacturing Purchasing Managers’ Index (PMI) has not risen above the 50-point mark since June 2011, dropping to 42 points in July 2013.
“Adding to the gloomy picture is Ford’s decision to shut down its manufacturing plants in Australia in 2016, which can have a significant impact on the country’s already struggling auto manufacturing industry,” the article said.
But it’s not all bad news, Business Review Australia says. “Despite the unfavourable circumstances that are threatening the Australian manufacturing industry, there are a number of manufacturing companies that are continuing to do well.
“One of Australia’s biggest manufacturing success stories is the rapid growth of its pharmaceuticals and biotech sector. CSL, which specialises in blood products, was worth about AU$300 million in 1994 and it has grown to become an AU$20 billion company over the years. This company is the number two manufacturer of blood products in the world, with 90% of its revenue coming from outside Australia.”
The article also lists advanced composite manufacturer Quickstep as one company defying the current economic climate.
“Despite the discouraging situation, some experts believe that the manufacturing industry in Australia is not dying; it is just changing,” the article concluded.
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