COVID-19 has, and continues, to have an unprecedented impact on Australia’s labour market, including the manufacturing industry and, in particular, some sub-sectors, such as Aviation as per Qantas’ announcement in June 2020. In its second report, the National Skills Commission shows the manufacturing industry recorded the second largest fall in employment over the period of February to August 2020, down 59,600 or 6.5% on pre-pandemic levels (based the latest available data at the time of publication).
Paradoxically, while manufacturing jobs were being lost, COVID-19 raised awareness of the importance of domestic manufacturing. Over four weeks in April and May 2020, the Australian Manufacturing Forum and @auManufacturing ran an ambitious campaign to crowd source from manufacturers a way forward for the industry. The grass roots campaign generated close to 50 substantial submissions, and wide engagement, which is summarised into A New Deal Plan for Manufacturing. It finds that COVID-19 revealed that while Australia’s manufacturing depth is thin, where it exists it is excellent, dynamic, globally competitive and provides good, solid ground for recovery. As such, the plan puts forward 11 recommendations, including a whole of industry workforce development plan that clarifies what work, knowledge, skill sand to what extent, when and where they are needed.
A Fair Share for Australian Manufacturing: Manufacturing Renewal for the Post-COVID Economy explores the strategic importance of manufacturing to Australia’s future prosperity. It finds that Australia ranks last in manufacturing self-sufficiency among all OECD countries. Australians use $565 billion worth of manufactures each year, however it produces $380 billon worth and Australians purchase and use more manufactured goods over time. As such, the author argues, national economic performance is undermined.
The report profiles the industry’s current status, highlighting Australia’s small value-added industries. It discusses in more detail several factors that have shaped Australia’s recent manufacturing performance, including: the nature of Australia’s international trade engagements, the state of the vocational education and training system, and new developments in energy altering traditional cost models. It describes broad principles of active industry policy and lists several specific measures that would build a stronger manufacturing sector.
In October 2020, the Australian Government released its whole-of-government Making it Happen: Modern Manufacturing Strategy, which it states is about backing an enterprise-led recovery. Its objective is to build scale and capture income in high-value areas of manufacturing where Australia either has established competitive strength or emerging priorities. As such, the strategy is designed around three components. First, to create a competitive business environment where Australian manufacturers can be more competitive. Second, to align resources to build scale in areas of competitive strength, and third to boost supply chain resilience. Areas identified of established competitive strength and emerging priority, the National Manufacturing Priorities, are the:
- Resources technology and critical minerals processing
- Food and beverage manufacturing
- Medical products
- Clean energy and recycling
- Defence industry
- Space industry.
The Government will partner with industry to immediately begin work developing road maps for each of the National Manufacturing Priorities which will build on existing sector plans. The Strategy is expected to deliver outcomes over the ten years.
