The manufacturing industry is one the leading factor to the development of any economy. The process of manufacturing industry involves processing of merchandises, creating new ones or adding value. The final merchandises might either be sold to the consumer or as intermediate merchandise that will be applied in the process of production. In Australia, during the lat five decades, the manufacturing industry has contributed to the Gross Domestic Product to 25% in the 1960s, but decline to 13% by 2001. Between the years 2004 to 2005, the Australia manufacturing industry employed 1.1 million people and exported merchandises worth $67,400 million. Moreover, between the years 2000 and 2001, the Australia Government allocated $3300 million to the manufacturing industry, whereby 40% went to the clothing, textile and footwear and the passenger motor vehicle industry. During that episode, the manufacturing accounted for 45% of Australia research development and 48% of exports (, 2010). 

Manufacturing Australia was founded to influence public policy and economic issues that affect manufacturing by offering a well-built voice for the industry. In Australia, the manufacturing industry employs around 1 million Australians or one in ten of the workers. Manufacturing industry in Australia is harshly threatened unless collective actions are taken to sustain worldwide competitiveness by rising innovation and competition, establishing more flexible industrial relations policies and rescheduling the carbon tax, until a resolution can be obtained that does not position Australia industry at a worldwide weakness (, 2010).

In Australia, ninety six percent believes that manufacturing is an essential industry for Australia’s future. They also state that manufacturing is crucial to their future; by possessing manufacturing sectors, they would be able to avoid simply turning into the world’s quarry. They add value to resources they mine and create high-tech and high wage jobs. As a result, they attract the investment in research and development that merely comes from possessing manufacturing ability.  Innovation and creating things go hand in hand plus manufacturing occupations encompass a superior multiplier. Manufacturers are being faced by a mainly testing environment because of the strength of the exchange rates and customer caution. Therefore, the case is clear that Australia’s manufacturing industry offers them the flexibility to react to a changing environment. A vigorous ant-dumping scheme is vital in assisting the underpin investment and assurance in domestic industry in manufacturing. The various amendments, which are proposed by the government, are aligned with changes the Australians had been seeking for (, 2010). 

Manufacturing Industry in Australia

The contribution of manufacturing industry to Australia’s GDP peaked in the 1960 at twenty five percent and had dropped to thirteen percent by the year 2001 to 2002. By the year 2005 to 2006, the gross domestic product was 10.5%, and in the same years, the manufacturing industry had exported goods worth $67,400 million and employed 1.2 million people. Thirty three hundred million dollars were used in the year 2001 and 2002 to assist manufacturing industry, with forty percent to the clothing, textile and footwear industry and the passenger motor vehicles industry. At that time, manufacturing industry had made forty-eight percent in exports and forty-five percent in Australian research and development.

For the last five years, the Australian manufacturing industry had been performing continually and in the last one and a half year, it had attained its peak. Last year, the Australian manufacturing industry reached the four hundred thousand mark in job openings. A great number has been devoted in the manufacturing industry for the reason of research and development as well as exploring modern technologies. This has made the future of the Australian manufacturing industry be bright, and other things are anticipated to be good. The manufacturing industry offered common of the products used by individuals in their day to day life (, 2011).

The Australian manufacturing industry has to endure harsh competition from other countries, for example, China and for Australian manufacturing to make it in the competitive market, it has to produce goods that are industry desired and as per industry standards. Furthermore, other countries are progressively incorporating most recent techniques for improving the quality of production. Investing more in the information technology area leads to improved manifold and all attempts are made to create latest techniques, which can increase Australian manufacturing industry productivity. The Australian manufacturing industry success is strongly determined by the well-organized communication with producers overseas and the market situation prevailing abroad. To a large extent, the manufacturing industry depends on its suppliers from overseas (, 2011).

In the year 2008, the breakdowns of manufacturing by states and the fraction of the Gross States Products (GSP) contributed are:


Fraction of manufacturing

Fraction of GSP

New South Wales









South Australia



Western Australia






Northern Territory



Australia Capital Territory



Sources: Australian Bureau of Statistics, retrieved on 14th Nov. 2011. From

Between year 2001 and 2007, the estimate breakdowns by industry changed are:


Per cent in the year 2001

Per cent in the year 2007

Food, beverages and tobacco



Textile, clothing and footwear



Wood and paper products



Printing, publishing and recorded media



Petroleum, coal and chemical products



Non-metal mineral products



Metal products



Machinery and equipment



Other manufacturing



Sources:  Australia Bureau statistics. Retrieved on 14th Nov. 2011. From

Food Processing

The food and beverage industry is the biggest in Australia, which includes following sectors:


Turnover (2005 to 2006, $ millions)

Meat and meat products


Beverage and malt manufacturing


Dairy products


Sugar and confectionery manufacturing


Fruit and vegetable processing


Bakery products


Flour mill and cereal food manufacturing


Oil and fat manufacturing


Seafood processing


Other food manufacturing




Sources: Australia Bureau Statistics. Retrieved on 14th Nov.2011, From

Australian Manufacturing Industry and Innovation

Currently, the Australian Federal Government has a bill ahead of the parliament to eliminate the research and development, tax allowance and substitute it with R&D credit. The consequence to this alteration would be more narrowed eligibility for just a small central part of experimental and research actions which could gain from the inducement. Several expansion activities in the manufacturing surroundings that are crucial to commercializing latest and modernized goods would not be eligible. This decreases the inducement for innovation in manufacturing industry and more specifically crossways Australian manufacturing industry. Encouraging research and development policy is very important to domestic industries, thus sustaining their global competitiveness (Jovane, Westkamper, and Williams, 2009).

Australian Manufacturing Industry and Productivity

According to the Performance of Manufacturing Index (PMI), there were significant decrease crossways textiles, transport equipment and miscellaneous manufacturing. This was mainly because of the strong Australian dollar, holding the manufacturing sector in negative side. The periodically regulated index went up 0.5 points to 48.4 to linger below the 50 point level unraveling expansion from contraction. Latest orders decreased again in the month, with 9 out of the 12 sub-sectors facing declines, while overall manufacturing production increased in April trading prices fallen lower with 8.7 points to 46.0 (Margaritis, 2005).

Heather, the Australian industry group chief executive states that the prolonged weakness of the Australia performance of index shows concern and the significant erosion in the competitiveness of the industry associated to the unpredictable and rising dollar. The uncertainty of how this will evolve is the quintessence of the constraints on the industry. Therefore, the Federal Budget was required to address this crucial uncertainty to the main and large employing sector of the nationwide economy. There is noticeably a requirement for more positive strategies to reach productivity in manufacturing industry through investments in energy effectiveness, workers expansion, the exploration of export chances and research and development. Additionally, apart from all this, it is crucial for the companies to sustain the look for new chances, new product lines and markets, plus sources of industrial effectiveness (Japanese Ministry of Economy, Trade, and Industry, 2002).

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Sustainability in Australian Manufacturing Industry

Decreasing CO2 is vital to the Australian manufacturers. Many manufacturers crosswise Australia are already putting in place collective actions to decrease the outcomes of their environmental footprint. The manufacturing industry in Australia such as Amcor is a worldwide leader in responsible worldwide packaging solutions. It offers a wide range of metal, fiber, metal and glass packaging to improve the products that customers use in their day-to-day activities. The company finished almost eighty hundred packaging lifecycle evaluations for its clientele. It increased the volume of its donation program and Australia water collection to 700 million liters for each year. In addition, it participated in many society-based, environmental schemes and social activities around the world (Institute for Manufacturing, 2007).

Blue Scope Steel is the global steel solutions business, with marketing and manufacturing footprint that extents Australia, Asia, North America and New Zealand. Steel is extremely recyclable and by quantity, the most recycled material around the world. The Port Kembla steelwork is the biggest manufacturing location with water efficient incorporated steelworks. Around ninety-eighty percent of the used water is recycled and the similar recycled water scheme is in progress at its western port plant in Victoria.

The Australian Service Economy

The services economy has supported Australia’s economy expansion and prosperity for at least two years. It has offered the jobs and high performance in production that have sustained privileged living standard in Australia. Increasingly, the provision of services as complements to products has also turn out to be an essential source of value added, differentiation and competitive advantage in the international markets. These trends mean the capability of Australia to compete in an emergent and developing international services market. It will be the main determinant of its capability to maintain strong expansion and economic success in the years ahead (King, 2010). 

Regardless of their economic impact, service industries are also frequently trivialized. Their contributions are viewed as not favorable as manufacturing, agriculture and mining. Services industries are frequently perceived to be semi-skilled, non-innovative and labor intensive. There is an extensive perception that services are less productive as traditional sectors plus not important in the real economy. These views weaken efforts to fully understand and advance the significance of services and thus can act as an obstacle to efficient development and policy debate (McCredie, 2011).

Manufacturing and Services Operations Environment

The present views of reduced significance of the manufacturing industry in Australia as well as entry of “service economy” look too unsophisticated. In contrast, both service and manufacturing companies are reacting to challenges arising as a result of competition from the crowded and tough markets that link services and products in inventive ways. This bundling and blurring of the services and products is restructuring the manufacturing industry and the competitive business action patterns in Australia (Kennedy, 2002).

The firms in Australia are developing new strategies for competitive purposes that are building fresh custom-made business offerings through the linkage of services and products in varied means to meet up clients’ requirements (New Business Chamber, 2011). The product-service packages are extensively distributed and diverse. Almost 75% of manufacturing companies surveyed by Kennedy (2002) as a piece of the Australian Business Foundation Research reported that firms included and retailed services together with products offered to clients. Normally, these incorporated prototyping, engineering, design as well as testing services throughout the production process, in addition to services like training, maintenance and information at point of transaction.

Service companies are also accumulating value to the physical products obtained from the manufacturers through bundling them by means of a vast range of services. For instance, telecommunications and computer firms are selling customized software, hardware and technical upgrades and support. Large scale, unique and composite infrastructure or construction projects like constructing, possessing, and managing sports stadium and airport are another instance of combining services and products to deliver a complete, highly tailored project (New Business Chamber, 2011).

This up-and-coming pattern of the product-service connection is a symbol of the modern economy changing to meet up a demand of the new markets in which customer is king. The purpose of bundling and blending services and products is to keep their clients, add value and at the same time to decrease risks and costs and finally differentiate themselves by customizing and expanding their offerings (Kennedy, 2002). This behavior is an evidence of the new strategies of competition being approved by the firms in Australia in order to succeed in the increasingly unstable as well as globalized commerce environment of inexpensive products, short-term product cycles, quick trade imitations, as well as saturated markets. Australian companies are competing by connecting services and products; this drives them to be knowledge-intensive and innovative (New Business Chamber, 2011). 

Working out innovative products-service packages extends the managerial, marketing and technical abilities of the companies, thus leading to unique expertise and intelligence that then drives the competitiveness and innovation. Creativity through packaging of the product-service has extensive effects on the firms’ competitiveness because companies concerned to keep clients and spend less effort on enlisting new ones. Moreover, they tend to create new skills within the firm, particularly through varying combination of market-related and technical skills. In addition, they also lean towards to be stretchy in restructuring their functions to go well with and satisfy client requirements and finally, work together with others, embracing clients, abroad and at home, raise their knowledge level or technical expertise. Such creativity does not entail research and development investment, and it frequently goes unidentified in Australia (Kennedy, 2002).


Many businesses in Australia hold perceptions that manufacturing is declining as services rise. The actuality is the up-and-coming convergence between services and manufacturing pointing to innovative competitive abilities in the Australian companies and thus, firms should make business decisions based on this and not their perceptions (New Business Chamber, 2011).

To promote such abilities, the Australian firms should work with other companies and organizations such as education and research bodies, in order to be close to clients, spend money in developing new skills, raise the number as well as widen the array of services offered by the firm, and make a U-turn within their firms, as well as the companies’ activities. The manufacturing promoters, as well as the public policy producers, should create opportunities for leaders in manufacturing to learn in order for them to comprehend more on the managerial innovation and company model innovation. In addition, they should learn how to research with the new advances to make a move in their capability to invent and develop as internationally competitive manufacturers in Australia. They should also institute dynamic society of practice, virtually and geographically, for the manufacturing companies to share their know-how, best practices, and problems as well as to work together in cross-disciplinary and cross-organization business analytical exercises, for instance, the PeerAssist is a role model program in the U.K.          

The ability of Australia manufacturing, service and operations industry to compete and thrive in worldwide markets will be the main factor underpinning future growth and success. Much attention requires to be paid to the manufacturing and service operations industry and to make sure that policy framework correctly enable and support them in progress, competitiveness and internalization of this industry. The Business Council of Australia will persist to advocate for an inclusive “reform agenda” to support sustained competitiveness crossways all the industries in Australia.  This agenda includes main reforms in their places of infrastructures, business policies, workplace relations and taxation. The Business Council of Australia will encourage the essential of a dynamic and competitive industry to the future economic of Australia and will embark on additional work concentrated on the role of investment, innovation and enhanced market accessibility for this industry. 

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