The death of Australian manufacturing: True or False?

15The reports of my death are greatly exaggerated!
Mark Twain

We need to talk about the death of Australian manufacturing.

It's a story that is often being told in the news.

"Yet another factory closure!

"Ford leaves the country!

"No manufacturing jobs are left in Australia!

"At the heyday of manufacturing in Australia in the 70s, we had around 25% of the workforce working in manufacturing. Today in 2021 this number is down to 6.8-tiny-measly-percentage-points, that is a clear obvious story of the death of Australian manufacturing!"

Not so fast.

This story doesn't hold true.

At the absolute height of manufacturing in Australia, we had 1.1 million workers working in the sector.

Today this number is 900,000 workers.

There's still a decline, there's still a net loss of 200,000 jobs but it's a far cry from the absolute obliteration of the sector.

So that is not true!

Australian manufacturing is actually much healthier than we might think.

Remember also that some of the 200,000 jobs we lost in the sector just transitioned to warehousing, as manufacturing nowadays operates in 'just-in-time' delivery systems to make sure that the warehousing costs for the manufacturer are as small as possible.

Car manufacturing, for example, left the country but there are other manufacturing sectors that have been doing extremely well in food and beverage manufacture, chemical manufacturing, for example, are doing really well in the country.

So, there is also the future we need to look into.

Well, will we continue to see it decline, or have we actually reached some sort of turning point?

Will we see a strengthening of manufacturing in the future?

At the start of the pandemic, there was one company in Australia that could produce medical-grade face masks.

Then lots of textile companies pivoted and we able to produce lots of face masks.

We were able to pivot small manufacturing companies to produce ventilators in Australia.

What happened here is we realised our supply-chains security and supply-chains sovereignty issues that come with a smaller manufacturing sector.

So what happened there is that government has essentially decided that it is smart to invest in manufacturing in Australia.

To make sure that we do have a strong supply of essential goods in case of another crisis. This could be a pandemic, some sort of international conflict, a trade war 'China-America', maybe a direct conflict or misunderstanding between us and China.

So these issues are something we are preparing for.

And there are a couple of reports that project that the manufacturing sector in Australia might see up to 500,000 new jobs through these investments at stake.

I think it might be a bit optimistic but there is still a real growth opportunity for several hundreds of thousands of jobs in manufacturing.

That it's absolutely crucial because these are the manufacturing jobs that we are actually creating.

Of course, there are plenty of high-skilled, or low-skilled jobs in manufacturing.

But more than anything this is a sector for middle-skilled workers by now.

We need more middle-skilled, middle-classed jobs.

And these are the kind of jobs we desperately need in Australia.

We are hollowing the workforce having lots of poor people, having lots of rich people with no one in the middle.

Manufacturing as an industry provides this middle-class, middle-skilled jobs.

So, please, do not believe the simple narrative of the Australian manufacturing sector that manufacturing is dying.

This is just not true.

We might just see a very large survival over the next decade.

About Simon Kuestenmacher Simon Kuestenmacher is one of Australia’s leading demographers, co-founder of The Demographics Group, a regular media commentator, a columnist for the Australian and one of the world’s Top 50 Influencers in Data Science.
www.SimonKuestenmacher.com