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MANUFACTURING GROWTH Australian manufacturing is set to continue its unexpected wave of growth throughout 2018 and beyond, buoyed by unprecedented infrastructure investment and a weakened Aussie dollar.
of infrastructure projects – particularly in New South Wales, and when you view this against a background of robust global economic growth, the opportunities are there for manufacturing to prosper.”
“More Australian manufacturers are exporting under the Coalition Government. For every $1 of revenue the sector generates, 28 cents comes from abroad. That’s up from 23 cents a decade ago,” says Senator Cash.
The growth of the manufacturing sector has been charted by the Ai Group Performance of Manufacturing Index, which peaked in March to a record high while marking 18 consecutive months of growth.
Bizarrely, the threat of a global trade war seems to have worked in favour of Australian industry – in the short term at least – by softening the value of the Aussie dollar.
Besa Deda is Chief Economist for St.George Bank, and having analysed the data is keen to highlight the continuing improvement in some of the subindexes of the Australian PMI. “It’s particularly encouraging,” she says, “that the new orders subindex is at a record high.”
Nonetheless, the nation’s reliance on export markets has increased in recent years. According to Minister for Jobs and Innovation Senator Michaelia Cash: “Australia’s access to global international markets will be fundamental to the continued health and success of our local manufacturing industry.
Besa Deda from St.George also sees positives in the manufacturing employment statistics. “Although manufacturing employment as a proportion of the economy as a whole is in a long-term decline, the recent gains are encouraging,” she says, pointing to nearly 10,000 new manufacturing jobs and increasing capital expenditure plans in the sector.
And while she is cautious about Australia’s exposure to any trade war involving China and the USA, Besa Deda points to a combination of factors fuelling the growth of the manufacturing sector. “There’s a bulging pipeline
One word of warning, though, comes from financial analyst illion, which noted in its most recent Australian Business Expectations Survey that one in three manufacturers had reported customers or suppliers become insolvent or unable to pay them in the preceding 12 months, highlighting cashflow as the second-biggest barrier to growth in the year ahead, after utilities and operating costs
“We export more than $20 billion a year more today than we did a decade ago. Australian exporters have, in fact, sold $2.7 trillion to the global economy over the last decade.
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