INDUSTRY SUBDIVISION ANALYSIS
Food, beverage and tobacco manufacturing
By most measures presented, this industry constitutes about one-fifth of Australian manufacturing. In 2005-06, Food, beverage and tobacco manufacturing was the largest manufacturing industry as measured by its share of sales and service income (21%). It ranked second in purchases of goods and materials (21%), wages and salaries (18%), employment (18%), net capital expenditure (16%), EBITDA (19%), and OPBT (18%). It ranked third in its contribution to IVA and trading profit (both 18%).
Reflecting higher input prices resulting from continuing drought conditions, total expenses increased slightly more than did total income. This led to only minimal increases in IVA and trading profit, and reduced EBITDA, OPBT and profit margin.
The industry is dominated by businesses employing 100 or more persons. These businesses contribute 83% of the subdivision's IVA, 81% of wages and salaries, 78% of sales and service income and 72% of employment. Compared to businesses employing 100 or more persons across the other eight industry subdivisions, those in Food, beverage and tobacco manufacturing provided the greatest proportion of employment (27%), and sales and service income, IVA and wages and salaries (each 24%). Businesses employing 1,000 or more persons produced 48% of the industry's IVA in 2005-06.
Textile, clothing, footwear and leather manufacturing
The smallest manufacturing subdivision by most key measures presented, Textile, clothing, footwear and leather manufacturing accounted for 3% or less of total manufacturing IVA, sales and service income, purchases of goods and materials, wages and salaries and all three profit measures. The industry made the smallest contribution to the total profits of Australian manufacturing and was its second smallest employer in 2005-06, providing 5% of the total employment in Australian manufacturing.
Over the period from 2001-02 to 2005-06, employment in this industry has decreased by 26%. Of the business size categories available for publication within Textile, clothing, footwear and leather manufacturing, businesses employing 0-4 persons accounted for 24% of the subdivision's estimated total employment, 17% of its sales and service income and 16% of IVA. However, businesses employing from 20 to 49 persons (with 17% of the industry's employment) also produced 16% of the subdivision's IVA and made the greatest contribution to wages and salaries (17%).
Wood and paper product manufacturing
In 2005-06, Wood and paper product manufacturing accounted for 7% of total manufacturing employment, 6% of IVA, wages and salaries, trading profit and EBITDA, and 5% of sales and service income, purchases of goods and materials, and OPBT.
Declining residential construction activity in 2005-06, and higher costs resulting from greater sourcing of timber from plantation forests, led to minimal movements in income which did not keep pace with increases in expenses. As a result EBITDA decreased by 10% and OPBT by 12%, whereas IVA and trading profit declined only marginally.
Printing, publishing and recorded media
This industry recorded a 5% increase in IVA in 2005-06. Trading profit increased by 4% and EBITDA by 6%. OPBT declined marginally.
Printing, publishing and recorded media's share of manufacturing purchases of goods and materials in 2005-06 was, at 3%, substantially less than its contribution to manufacturing's total IVA, employment, wages and salaries (all 10%), sales and service income (6%), EBITDA (11%) and OPBT (12%). Conversely, labour costs constituted 30% of the total expenses of this industry, compared to 18% at the total manufacturing level.
Petroleum, coal, chemical and associated product manufacturing
Petroleum, coal, chemical and associated product manufacturing sales and service income and total income increased by 15% in 2005-06. Total expenses increased more moderately (by 13%), despite a 17% increase in purchases of goods and materials which partly reflects higher prices of key inputs, notably crude oil and its derivatives. IVA and trading profit increased by 9%. EBITDA and OPBT rose more substantially (by 15% and 32% respectively), translating to an increase in profit margin from 6.0% to 6.9%.
In 2005-06 Petroleum, coal, chemical and associated product manufacturing accounted for 14% of IVA for total manufacturing, 19% of sales and service income, 24% of purchases of goods and materials, 17% of EBITDA and OPBT, and 14% of trading profit. It also accounted for 12% of wages and salaries and 10% of employment at the end of June 2006.
Of the total capital expenditure in this industry in 2005-06 capital work done by businesses for their own use represented 7%, the highest proportion of any manufacturing subdivision.
Businesses employing 100 or more people accounted for 56% of employment in Petroleum, coal, chemical and associated product manufacturing. Such businesses produced 82% of the industry's sales and service income and 73% of its IVA, and paid 69% of its wages and salaries.
Non-metallic mineral product manufacturing
Most key variables showed little change from 2004-05. Higher costs for fuel and energy were largely matched by increased prices received. On the demand side, growth in infrastructure and non-residential construction marginally offset a fall in residential construction activity. Wages and salaries rose (by 5%).
In 2005-06, the subdivision's share of both total acquisitions of assets and net capital expenditure in manufacturing was 5%.
Metal product manufacturing
This industry comprises about one-fifth of Australian manufacturing. Its share of employment is slightly less (17%). In 2005-06 Metal product manufacturing was the largest source of manufacturing OPBT (24%) and EBITDA (22%). It ranked second in total income and sales and service income (both 20%), and IVA and trading profit (both 19%). The industry ranked third in employment and labour costs (both 17%).
After a strong year of growth in 2004-05 Metal product manufacturing's performance was more subdued in 2005-06, reflecting commodity input prices for metals and energy which increased more strongly than prices received. IVA increased by 4% and trading profit by 3%, and EBITDA was relatively unchanged. OPBT decreased by 9%. Employment rose marginally and wages and salaries increased by 6%.
Metal product manufacturing increased its net capital expenditure by $1.9b (or 51%) in 2005-06, the strongest absolute growth of any manufacturing subdivision. The industry also contributed the highest net capital expenditure (32%, or $5.5b), and recorded the highest investment rate (value added) of 29.5%.
Businesses employing fewer than 100 persons provided 59% of this industry's employment at the end of June 2006.
Machinery and equipment manufacturing
In 2005-06, IVA of Machinery and equipment manufacturing increased by 5%. Employment increased by 2% and wages and salaries grew by 8%. The industry's increase in trading profit (6%) exceeded its 2% increase in both OPBT and EBITDA.
Machinery and equipment manufacturing was the largest source of manufacturing IVA ($20.2b, or 20%) and employment (242,200 persons, or 23%), and paid the greatest amount ($12.1b, or 24%) in wages and salaries. The subdivision contributed 16% to total capital acquisitions and 15% to net capital expenditure. It contributed 20% to total manufacturing trading profit, but only 14% to EBITDA and OPBT.
The largest recipient of funding from government for operational costs of any manufacturing industry, Machinery and equipment manufacturing received 65% of all such funding provided to manufacturing in 2005-06. Assistance to the motor vehicle industry is a major element.
Employment within Machinery and equipment manufacturing was almost equally shared between businesses employing fewer than 100 persons (49%) and those employing 100 or more (51%). However, businesses employing 100 or more persons paid 60% of the wages and salaries of this industry, and made similar contributions to sales and service income (63%) and IVA (59%).
Other manufacturing
In 2005-06, Other manufacturing accounted for 7% of total manufacturing employment but 5% or less of wages and salaries, IVA, sales and service income, purchases of goods and materials, and the various profit measures presented.
Other manufacturing is the subdivision most heavily dominated by businesses employing fewer than 100 persons. In this industry, these businesses account for 89% of employment, 84% of wages and salaries, 85% of sales and service income, and 84% of IVA. All employment size categories representing businesses employing fewer than 100 persons in Other manufacturing made greater percentage contributions to the industry than the equivalent employment size categories did in the other subdivisions.
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