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1301.0 - Year Book Australia, 2005  
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 21/01/2005   
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Contents >> Manufacturing >> Structure and performance of the manufacturing industry

The major source for the statistics in this section is the Economic Activity Survey (EAS) of employing businesses conducted by the Australian Bureau of Statistics (ABS). Businesses in this collection are classified on the basis of their predominant activity, using the 1993 edition of ANZSIC.

Production of an industry can be measured in terms of industry value added (IVA), in much the same way as industry GVA. However, unlike industry GVA (the national accounts concept of production), IVA is not adjusted for a number of national accounting conventions, as the information to make these adjustments cannot be collected in the EAS. The advantage of IVA, however, is the availability of more detailed industry and state estimates.

Summary of operations in 2000-01

At 30 June 2001 manufacturing businesses employed 945,900 persons. This includes full-time and part-time employees, but does not include directors who are not paid a salary or self-employed persons such as contractors, owner drivers, consultants or persons paid solely by commission without a retainer. In 2000-01 manufacturing businesses paid $42,920m in labour costs, generated $251,759m of sales of goods and services income, and $71,945m of IVA (table 18.3).

The manufacturing industry subdivisions with the most persons employed at 30 June 2001 were: machinery and equipment manufacturing (202,200); food, beverage and tobacco manufacturing (189,600); and metal product manufacturing (147,000). The non-metallic mineral product manufacturing industry was the smallest employer, accounting for only 37,200 (or 3.9%) of persons employed in the manufacturing industry.

Food, beverage and tobacco manufacturing was the largest contributor to total manufacturing sales and service income and total manufacturing IVA. This industry's sales and service income of $56,626m was 22% of the total for manufacturing, and its IVA of $14,709m accounted for 20%. Other industry subdivisions making major contributions were: machinery and equipment manufacturing (20% of sales and service income and 19% of IVA); petroleum, coal, chemical and associated product manufacturing (19% and 14%); and metal product manufacturing (16% and 19%).


18.3 SUMMARY OF OPERATIONS - 2000-01

Employment
at 30 June
Labour
costs(a)
Sales of goods
and services income
Industry
value added
Manufacturing industry subdivision
’000
$m
$m
$m

Food, beverage and tobacco manufacturing
189.6
8,173
56,626
14,709
Textile, clothing, footwear and leather manufacturing
57.8
1,951
9,111
2,583
Wood and paper product manufacturing
65.0
2,751
15,077
4,929
Printing, publishing and recorded media
91.6
4,213
15,929
6,599
Petroleum, coal, chemical and associated product manufacturing
101.3
5,537
47,115
9,960
Non-metallic mineral product manufacturing
37.2
1,903
9,777
3,606
Metal product manufacturing
147.0
6,999
40,517
13,655
Machinery and equipment manufacturing
202.2
9,621
50,645
13,487
Other manufacturing
54.2
1,772
6,963
2,417
Total manufacturing
945.9
42,920
251,759
71,945

(a) Includes wages and salaries, payroll tax, fringe benefits taxes, workers compensation costs and employers contributions to superannuation.

Source: Manufacturing Industry, Australia, 2000-2001 (8221.0).


The generally close relationship between share of employment and contribution to IVA is indicated in graph 18.4. The three largest industry subdivisions for both employment and IVA - machinery and equipment manufacturing; food, beverage and tobacco manufacturing; and metal product manufacturing - employed 57% of the manufacturing workforce in 2000-01 and contributed 58% of IVA.

Graph 18.4: INDUSTRY VALUE ADDED AND EMPLOYMENT - 2000-01



State distribution of activity

In 2000-01 New South Wales and Victoria continued to be the largest contributors to manufacturing IVA, each accounting for 32% of total manufacturing IVA (table 18.5). New South Wales contributed 40% of the total IVA of the printing, publishing and recorded media industry and between 26% and 33% of the total IVA of the remaining manufacturing industries. Victoria contributed 50% of the total IVA of the textile, clothing, footwear and leather manufacturing industry, 39% of the total IVA of the machinery and equipment manufacturing industry and between 24% and 37% of the total IVA of the remaining manufacturing industries.

Although Queensland accounted for 14% of overall manufacturing IVA, it contributed 17% for both metal product manufacturing and food, beverage and tobacco manufacturing. The contributions of South Australia and Western Australia to total manufacturing IVA were similar at 8.6% and 9.4% respectively, although the structure of the manufacturing industry was very different. Machinery and equipment manufacturing was the largest manufacturing industry in South Australia, accounting for 29% of state production and 13% of the total IVA for the industry. South Australia also contributed between 5.9% and 11% of the total IVA of the remaining manufacturing industries. Western Australia contributed 17% of total IVA for metal product manufacturing and 13% of non-metallic mineral product manufacturing. Metal product manufacturing was the largest manufacturing industry in the state, accounting for 34% of state production.

Manufacturing was not as significant for the remaining state and territories. Tasmania, which accounted for 2.4% of total manufacturing IVA, contributed 6.6% of total IVA for wood and paper product manufacturing. The shares of national production for the Northern Territory and the Australian Capital Territory were each less than 1%.


18.5 INDUSTRY VALUE ADDED - 2000-01

NSW
Vic.
Qld
SA
WA
Tas.
NT
ACT
Aust.
Manufacturing industry subdivision
$m
$m
$m
$m
$m
$m
$m
$m
$m

Food, beverage and tobacco manufacturing
4,681
4,571
2,559
1,492
934
409
34
29
14,709
Textile, clothing, footwear and leather manufacturing
681
1,302
211
177
150
58
(a)n.p.
(a)n.p.
2,583
Wood and paper product manufacturing
1,511
1,405
807
540
324
323
5
15
4,929
Printing, publishing and recorded media
2,668
1,976
799
390
540
76
32
119
6,599
Petroleum, coal, chemical and associated product manufacturing
3,105
3,688
1,199
580
1,237
140
8
3
9,960
Non-metallic mineral product manufacturing
1,176
934
602
291
451
103
27
23
3,606
Metal product manufacturing
4,340
3,273
2,362
764
2,269
470
(a)n.p.
(a)n.p.
13,655
Machinery and equipment manufacturing
4,115
5,311
1,368
1,798
651
162
34
49
13,487
Other manufacturing
791
793
417
162
225
15
(a)n.p.
(a)n.p.
2,417
Total manufacturing
23,067
23,251
10,323
6,192
6,780
1,757
301
274
71,945

(a) Not separately published, included in totals.

Source: Manufacturing Industry, Australia, 2000-2001 (8221.0).


Graph 18.6 shows relative contributions to overall manufacturing production by states and territories in 2000-01. Victoria and New South Wales contributed approximately two-thirds of total manufacturing production between them.

Graph 18.6: MANUFACTURING PRODUCTION(a), By state and territory - 2000-01



Table 18.7 shows the manufacturing industry's contribution to state production. The trend for the manufacturing industry's share of total production in all states has generally been decreasing, even though Australian manufacturing production grew by more than 34% at current prices between 1994-95 and 2002-03. This is because the growth in manufacturing production has been at a slightly slower rate than the growth in other industries.


18.7 MANUFACTURING INDUSTRY'S CONTRIBUTION TO STATE PRODUCTION(a)

1994-95
1995-96
1996-97
1997-98
1998-99
1999-2000
2000-01
2001-02
2002-03
%
%
%
%
%
%
%
%
%

New South Wales
14.3
14.1
13.5
13.8
13.3
12.7
12.0
11.8
11.7
Victoria
17.5
17.4
17.2
17.2
16.1
15.5
15.0
14.6
14.5
Queensland
11.4
11.4
11.0
11.3
10.8
10.1
10.2
10.1
9.9
South Australia
16.8
16.7
16.6
17.1
15.5
14.9
14.2
14.2
14.7
Western Australia
9.1
9.3
9.3
9.4
8.9
8.3
8.6
8.6
9.0
Tasmania
14.8
14.9
14.5
14.7
14.9
14.7
14.5
14.1
13.7
Northern Territory
4.7
4.9
4.4
4.6
3.9
3.9
3.3
4.0
3.6
Australian Capital Territory
2.3
2.3
2.2
1.9
1.7
1.8
1.7
1.8
1.7

(a) State production as measured by total factor income at current prices.

Source: Australian National Accounts: State Accounts, 2002-03 (5220.0).


Table 18.8 shows the IVA and employment of the manufacturing industry in each state and territory. Victoria and New South Wales were the major contributors to manufacturing employment, accounting for 32% and 31% respectively of total manufacturing employment. Together they accounted for almost two-thirds of total manufacturing employment at 30 June 2001. In all manufacturing industries, either New South Wales or Victoria was the largest employing state.

The proportions contributed by Victoria to persons employed in the various industries ranged from 26% for metal product manufacturing to 47% for textile, clothing, footwear and leather manufacturing while New South Wales' contributions varied from 26% for textile, clothing, footwear and leather manufacturing to 39% for printing, publishing and recorded media manufacturing.

Machinery and equipment manufacturing was the largest manufacturing employer in New South Wales (where it accounted for 20% of the state's manufacturing employment), Victoria (23%) and South Australia (33%). The largest industry employers in the other states and territories were food, beverage and tobacco manufacturing in Queensland (27%) and Tasmania (31%); metal product manufacturing in Western Australia (21%) and Northern Territory (36%); and printing, publishing and recorded media in the Australian Capital Territory (39%).

Total manufacturing IVA per person employed ranged from $67,000 in the Australian Capital Territory and South Australia to $91,000 in the Northern Territory and Western Australia (table 18.8). This difference could be attributed to the industry mix within each state or territory. For instance, the relatively capital intensive petroleum, coal, chemical and associated product manufacturing, which made up a significant proportion of Western Australia's manufacturing production, had a much higher IVA per person than textile, clothing, footwear and leather manufacturing, which was a relatively small industry in Western Australia.


18.8 MANUFACTURING INDUSTRY VALUE ADDED AND EMPLOYMENT - 2000-01

Industry value added
Employment at 30 June
Industry value added per person employed
$m
’000
$'000

New South Wales
23,067
296
78
Victoria
23,251
302
77
Queensland
10,323
153
68
South Australia
6,192
93
67
Western Australia
6,780
74
91
Tasmania
1,757
21
85
Northern Territory
301
3
91
Australian Capital Territory
274
4
67

Source: Manufacturing Industry, Australia, 2000-2001 (8221.0).


Employment

The number of full-time and part-time workers in each manufacturing subdivision is provided in table 18.9. The number of employed persons shown in table 18.9 differs from the employment figures in tables 18.3 and 18.8 mainly because it includes directors who are not paid a salary and self-employed persons such as contractors, owner/drivers, consultants and persons paid solely by commission without a retainer. These categories are excluded from the employment figures in tables 18.3 and 18.8.

In May 2004 the manufacturing industry employed 11% of total persons employed. Males outnumbered females by a ratio of almost 3:1 (74% males and 26% females). The majority of people employed in the manufacturing industry were employed full time (94% of males and 70% of females), which is higher than the proportion of people employed full time in all industries (85% of males and 54% of females).

The largest employers of males were machinery and equipment manufacturing (193,500) and metal product manufacturing (133,000). The largest employers of females were food, beverage and tobacco manufacturing (56,100) and machinery and equipment manufacturing (47,600).

Further information on employed wage and salary earners and the characteristics of the manufacturing labour force is provided in Chapter 6 Labour.


18.9 PERSONS EMPLOYED IN MANUFACTURING INDUSTRY - May 2004

Males
Females
Persons



Full-time
Part-time
Total
Full-time
Part-time
Total
Full-time
Part-time
Total
Manufacturing industry subdivision
'000
'000
'000
'000
'000
'000
'000
'000
'000

Food, beverage and tobacco manufacturing
112.7
9.7
122.4
39.7
16.3
56.1
152.4
26.1
178.5
Textile, clothing, footwear and leather manufacturing
19.5
1.5
21.0
27.4
10.8
38.3
46.9
12.4
59.2
Wood and paper product manufacturing
60.6
4.3
64.9
8.0
2.8
10.9
68.6
7.1
75.8
Printing, publishing and recorded media
58.6
8.2
66.8
30.0
14.3
44.3
88.6
22.5
111.1
Petroleum, coal, chemical and associated product manufacturing
66.9
2.9
69.8
24.0
7.0
31.0
90.9
9.9
100.8
Non-metallic mineral product manufacturing
31.6
2.4
34.0
5.3
4.3
9.5
36.8
6.7
43.5
Metal product manufacturing
127.2
5.8
133.0
10.4
5.0
15.4
137.7
10.8
148.5
Machinery and equipment manufacturing
186.3
7.2
193.5
34.9
12.7
47.6
221.2
19.9
241.1
Other manufacturing
55.8
6.1
61.9
12.1
7.1
19.2
68.0
13.1
81.1
Total manufacturing(a)
755.6
49.6
805.1
203.2
85.2
288.3
958.7
134.8
1,093.5

(a) Includes 47,700 persons employed full time and 6,200 persons employed part time not classified to an industry subdivision.

Source: Labour Force Australia, Detailed - Electronic Delivery (6291.0.55.001).


Table 18.10 presents information on average weekly earnings (i.e. ordinary time earnings plus overtime earnings) of employees in the manufacturing industry and all industries. Between May 1984 and May 2004 the average earnings of full-time employees increased by 169% in the manufacturing industry, which was slightly higher than the increase of 157% for all industries. The earnings of both male and female full-time employees in manufacturing increased but the increase for female employees was 21 percentage points more than the increase for male employees, although female earnings came from a lower base and are still well below average male earnings. In the manufacturing industry the average weekly earnings for male full-time employees at May 2004 was higher by 29% than female full-time employees. In May 1984 male full-time employees were earning 39% more than female full-time employees.


18.10 AVERAGE WEEKLY EARNINGS(a)

All employees
Full-time employees


May 1984
May 2004
Change
from May 1984
to May 2004
May 1984
May 2004
Change
from May 1984
to May 2004
$
$
%
$
$
%

Males
Manufacturing
376.60
978.90
159.9
395.30
1,041.40
163.5
All industries
383.80
891.20
156.3
415.70
1,065.30
156.3
Females
Manufacturing
261.60
688.30
163.1
284.70
810.20
184.6
All industries
257.10
588.50
128.9
324.20
866.30
167.2
Persons
Manufacturing
347.20
907.40
161.4
368.70
993.40
169.4
All industries
333.40
746.30
123.9
386.30
993.60
157.2

(a) Derived by dividing estimates of weekly total earnings (including overtime) by estimates of number of employees. Changes in average weekly earnings may be affected not only by changes in the level of earnings of employees but also by changes in the overall composition of the wage and salary earner segment of the labour force.

Source: Average Weekly Earnings, Australia (6302.0).


Operating profit before tax

The operating profit before tax (OPBT) earned by all manufacturing businesses. Industry subdivisions contributing most to manufacturing industry profits for 2000-01 were: metal product manufacturing ($3,842m or 25% of total manufacturing OPBT); food, beverage and tobacco manufacturing (24%); petroleum, coal, chemical and associated product manufacturing (14%); and machinery and equipment manufacturing (12%) (table 18.11).

Profits for five industry subdivisions were higher in 2000-01 than they were for 1995-96, although there were some significant movements in profits in the intervening years. Metal product manufacturing profits were much higher in 2000-01 than in 1995-96, but actually fell in 1996-97 and 1998-99 before recovering strongly in 1999-2000 (up 24%) and then even more strongly in 2000-01 (up 33%). Printing, publishing and recorded media profits, at $1,387m in 2000-01, were very similar to the $1,266m profit in 1995-96, but were 32% lower than the $2,044m profit for the manufacturing subdivision in 1999-2000.


18.11 OPERATING PROFIT BEFORE TAX

1995-96
1996-97
1997-98
1998-99
1999-2000
2000-01
Manufacturing industry subdivision
$m
$m
$m
$m
$m
$m

Food, beverage and tobacco manufacturing
2,321
2,479
2,946
2,966
3,379
3,780
Textile, clothing, footwear and leather manufacturing
435
404
381
354
409
107
Wood and paper products manufacturing
872
790
845
1,078
1,275
1,031
Printing, publishing and recorded media
1,266
1,174
1,459
1,519
2,044
1,387
Petroleum, coal, chemical and associated product manufacturing
2,179
2,351
2,068
1,865
2,603
2,231
Non-metallic mineral product manufacturing
917
811
829
924
1,123
914
Metal product manufacturing
2,685
2,292
2,515
2,342
2,898
3,842
Machinery and equipment manufacturing
2,621
2,471
2,213
1,832
1,942
1,853
Other manufacturing
397
300
343
266
371
365
Total manufacturing
13,693
13,072
13,601
13,146
16,042
15,509

Source: Summary of Industry Performance, Australia, Data Report - Electronic Delivery (8140.0.55.002).


Contribution by size of business

In this section, the performance of manufacturing businesses is examined in relation to the size of those businesses. Employing businesses have been classified as small, medium or large according to the number of people employed by the business at 30 June 2001. Businesses employing fewer than 20 persons have been classified as small, those employing at least 20 but less than 100 persons have been classified as medium, and those employing 100 or more persons have been classified as large businesses.

Large businesses employed more than 50% of the people working in the manufacturing industry, and their share of economic activity, as measured by income, profits and capital outlays, was around 75% (graph 18.12). Small businesses employed 24% of the manufacturing work force, but their share of manufacturing activity was much less significant, at around 11%.

Graph 18.12: SHARE OF MANUFACTURING ACTIVITY, By size of business - 2001



Capital expenditure

The manufacturing industry was responsible for $11.0b of capital expenditure in 2000-01, which accounted for 14% of capital expenditure by businesses in all industries. Within manufacturing, the industry subdivisions with largest capital expenditure were: food, beverage and tobacco manufacturing (23% of total manufacturing capital expenditure); petroleum, coal, chemical and associated product manufacturing (20%); metal product manufacturing (18%); and machinery and equipment manufacturing (15%).

Capital expenditure by the manufacturing industry decreased by 5.4% over the period 1995-96 to 2000-01 (table 18.13).

A majority of manufacturing industry subdivisions recorded increases in capital expenditure over the 1995-96 to 2000-01 period - the largest increase was in printing, publishing and recorded media (up 72% or $387m). However, the increases were offset by decreases in expenditure mainly in metal product manufacturing (down 33% or $1.0b), and wood and paper product manufacturing (down 36% or $324m).


18.13 CAPITAL EXPENDITURE

1995-96
1996-97
1997-98
1998-99
1999-2000
2000-01
Change
from 1995-96
to 2000-01
Manufacturing industry subdivision
$m
$m
$m
$m
$m
$m
%

Food, beverage and tobacco manufacturing
2,402
2,400
2,915
2,822
2,189
2,537
5.6
Textile, clothing, footwear and leather manufacturing
253
421
465
290
257
278
9.9
Wood and paper product manufacturing
907
1,048
734
988
900
583
-35.7
Printing, publishing and recorded media
538
595
859
807
933
925
71.9
Petroleum, coal, chemical and associated product manufacturing
2,010
2,109
1,918
1,943
1,942
2,181
8.5
Non-metallic mineral product manufacturing
677
710
792
573
616
593
-12.4
Metal product manufacturing
3,031
1,575
3,034
3,099
1,949
2,020
-33.4
Machinery and equipment manufacturing
1,656
1,455
2,072
1,589
1,347
1,682
1.6
Other manufacturing
188
200
220
293
245
232
23.4
Total manufacturing
11,664
10,513
13,007
12,404
10,379
11,031
-5.4

Source: Summary of Industry Performance, Australia, Data Report - Electronic Delivery (8140.0.55.002).


International trade by industry of origin

Exports by industry of origin

The manufacturing industry dominates Australia's value of exports by industry of origin, accounting for 57% of total exports in 2003-04 (table 18.14). The value of manufacturing exports is 42% higher in 2003-04 than it was in 1993-94. However, the share of total value of exports of the manufacturing industry has been trending down each year since the high of 65% in 1994-95.


18.14 VALUE OF MERCHANDISE EXPORTS, By industry of origin(a)

Manufacturing
All industries
Manufacturing share
of total exports
$m
$m
%

1994-95
43,795
67,052
65.3
1995-96
48,787
76,005
64.2
1996-97
48,494
78,932
61.4
1997-98
53,301
87,768
60.7
1998-99
52,073
85,991
60.6
1999-2000
57,982
97,286
59.6
2000-01
69,128
119,539
57.8
2001-02
69,111
121,108
57.1
2002-03
65,810
115,479
57.0
2003-04
62,224
108,906
57.1

(a) On a free-on-board basis.

Source: ABS data available on request, International Trade.


Graph 18.15 shows the five main destinations for manufacturing commodities exported from Australia, during the period 1998-99 to 2003-04. The United States of America was the major destination of Australian manufacturing exports in terms of value, with $7.3b worth exported for 2003-04, down from $9.1b in 2001-02. Japan has moved from Australia's largest destination of manufactured goods in 1999-2000 to be about equal with New Zealand in 2002-03 and 2003-04, and behind the United States of America. The value of manufacturing exports to New Zealand rose from $5.2b in 1998-99 to $6.9b, in 2003-04.

Graph 18.15: MANUFACTURING EXPORTS, Main destinations



Imports by industry of origin

The manufacturing industry accounted for 94% of Australia's value of imports by industry of origin during the period 1994-95 to 2003-04 (table 18.16). The value of Australia's imports of manufactured goods was 74% more in 2003-04 than in 1994-95.


18.16 VALUE OF MERCHANDISE IMPORTS, By industry of origin(a)

Manufacturing
All industries
Manufacturing share
of total imports
$m
$m
%

1994-95
70,733
74,619
94.8
1995-96
73,545
77,792
94.5
1996-97
73,747
78,998
93.4
1997-98
85,746
90,684
94.6
1998-99
92,437
97,611
94.7
1999-2000
102,382
110,078
93.0
2000-01
108,331
118,317
91.6
2001-02
111,162
119,649
92.9
2002-03
123,041
133,129
92.4
2003-04
122,867
131,020
93.8

(a) Customs value.

Source: ABS data available on request, International Trade.


Graph 18.17 shows the five main countries for value of manufacturing commodities imported to Australia, in the period 1998-99 to 2003-04. In each year of this period, Australia imported more manufactured goods from the United States of America than from any other country. The value of manufactured goods imported from China grew 150% from $6.0b in 1998-99 to $14.9b in 2003-04.

Graph 18.17: MANUFACTURING IMPORTS(a), Selected countries



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