The Australian manufacturing industry is a key part of the national economy. While it is growing, is there more to support this expansion?
As one of Australia's most important industries, the manufacturing sector is always considered a benchmark for the economy as a whole. When this industry is growing and progressing well, it's often a sure sign that the country is in a good spot.
Based on the Manufacturing Industry Innovation report, the sector currently employs close to one million Australians and producing a third of exports and $100 billion to the national economy - highlighting its value to the country.
With this in mind, it is positive to report the position of the manufacturing industry at the end of 2015.
December continues growth streak
According to the Australian Industry Group/Australian Performance of Manufacturing Index, the sector finished the year at 51.9 points - comfortably higher than the balance between contraction and expansion (50 points).
While the industry slowed in its expansion in December, its progress over the last five years is unquestioned and a sure sign for business owners to invest in new resources, products and projects.
Across the majority of the eight manufacturing sub-sectors, there was also considerable expansion. This included wood and paper products (64.3 points), petroleum, coal, chemical and rubber products (55.2 points), on-metallic mineral products (54.2 points) and printing and recorded media (50.9 points).
Innes Willox, AI Group chief executive, explained that the manufacturing industry had an outstanding second half of the year and business leaders should be looking forward to what 2016 presents.
"With export growth solid and production, sales and new orders all on the rise, there is now a very good base from which manufacturers can launch a prosperous 2016," he noted.
Need for innovation key
While the manufacturing industry is moving in the right direction, business leaders will need to continue to adopt innovative practices to keep up on the world stage.
This was cited in 2016 Global Manufacturing Competitive Index from Deloitte. Dropping to 21st position from 16th in 2013, Australia's manufacturing competitiveness was called into question against global rivals. In fact, it is predicted that this ranking could fall further before the next index in 2020.
Deloitte Australia Partner and Manufacturing Group leader, Damon Cantwell noted that the manufacturing industry has changed and taking advantage of technology is vital to meeting the demands of customers and suppliers.
"Given these global trends, the uptake of advanced manufacturing techniques in the Australian sector is the key to future consolidation and growth," she noted.
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