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1301.0 - Year Book Australia, 2012  
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Manufacturing

MANUFACTURING INDUSTRY

ECONOMIC CONTRIBUTION

The contribution of an industry to the overall production of goods and services in an economy, gross domestic product (GDP), is measured by industry gross value added (GVA). Information on the relationship between industry GVA and GDP is provided in the INDUSTRY STRUCTURE AND PERFORMANCE chapter.

Total production of the Manufacturing industry, as measured by industry GVA (in volume terms), increased 37% from 1991–92 to a peak of $116 billion in 2007–08 (graph 20.1). The impact of the global financial crisis saw the level of manufacturing production fall by 6% in 2008–09, before staging a small recovery in 2009–10.

Graph 20.1 MANUFACTURING PRODUCTION(a)(b)



Table 20.2 shows the industry GVA for components of the Manufacturing industry. The contribution of the Manufacturing industry to Australia's GDP between 2005–06 and 2009–10 fell from 9.5% to 8.7%.

During this period, Manufacturing industry GVA (in volume terms) rose $1.3 billion or 1.1%. The largest increase in production over the period was for Metal products manufacturing (15%), followed by Food, beverage and tobacco products (4.4%).

Production for the Textile, clothing and other manufacturing industry fell by 24%. Other industries that recorded falls over this period were Printing and recorded media (18%), Wood and paper products (10%) and Petroleum, coal, chemical and rubber products (6.3%).

In the year to June 2010, the Textile, clothing and other manufacturing industry suffered the biggest fall in production (18% decrease), while Food, beverage and tobacco products experienced the greatest rise (6.9%).


20.2 MANUFACTURING INDUSTRY, Gross value added(a)
NIPIND Sub-industries(b)
2005–06
2006–07
2007–08
2008–09
2009–10
Percentage change from 2005–06 to 2009–10

Food, beverage and tobacco products$m
22 743
22 973
22 945
22 228
23 755
4.4
Textile, clothing and other manufacturing$m
6 153
6 096
6 381
5 720
4 704
–23.5
Wood and paper products$m
8 309
8 080
7 768
7 176
7 442
–10.4
Printing and recorded media$m
5 484
5 536
5 676
4 683
4 486
–18.2
Petroleum, coal, chemical and rubber products$m
20 979
20 608
21 113
18 995
19 660
–6.3
Non-metallic mineral products$m
5 424
5 551
5 801
5 764
5 658
4.3
Metal products$m
20 048
22 024
24 521
23 738
22 990
14.7
Machinery and equipment$m
21 671
21 659
22 375
21 099
22 361
3.2
Total manufacturing(c)$m
109 798
111 869
116 306
109 403
111 057
1.1
Contribution to GDP%
9.5
9.4
9.4
8.7
8.7

(a) Volume measures. Reference year is 2008–09.
(b) Classified according to the National Income and Production Industry Classification (NIPIND) which uses as its basis the Australian and New Zealand Standard Industrial Classification (ANZSIC), 2006 edition (1292.0).
(c) Volume measures for years other than 2008–09 and 2009–10 are not additive.
Source: Australian System of National Accounts, 2009–10 (5204.0).


Contribution to state and territory production

Graph 20.3 shows the Manufacturing industry's contribution to state and territory production (in current prices) for 2009–10. Tasmania and South Australia had the highest contribution to state production from manufacturing (11.7% and 11.6% respectively), followed by Victoria (11.2%) and New South Wales (9.6%). The Australian Capital Territory had the lowest contribution by manufacturing in 2009–10, with 1.1%.

Graph 20.3 MANUFACTURING INDUSTRY'S CONTRIBUTION TO STATE AND TERRITORY PRODUCTION(a)—2009–10



STRUCTURE AND PERFORMANCE

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 Economic Activity Survey (a major source of data in this section). The advantage of IVA is the availability of more detailed industry.

In 2009–10, manufacturing businesses paid $52 billion in wages and salaries, and generated $381 billion of sales and service income and $97 billion of industry value added (IVA) (table 20.4).

Food product manufacturing was the largest contributor to total manufacturing sales and service income ($74b or 19%), the largest contributor to wages and salaries ($9b or 18%), and also contributed the most to total manufacturing IVA ($17b or 17%). Other industries making major contributions were Primary metal and metal product manufacturing (16% of sales and service income and 7% of IVA), Machinery and equipment manufacturing (9% of sales and service income and 11% of IVA) and Transport equipment manufacturing (8% of sales and service income and 9% of IVA).


20.4 MANUFACTURING INDUSTRY(a), Selected performance measures—2009–10

Wages and salaries(b)
Sales and service income(c)
Industry value added
ANZSIC Subdivision
$m
$m
$m

Food product manufacturing
9 183
74 128
16 832
Beverage and tobacco product manufacturing
1 942
17 770
6 609
Textile, leather, clothing and footwear manufacturing
1 595
9 162
2 839
Wood product manufacturing
2 224
12 692
4 211
Pulp, paper and converted paper product manufacturing
1 459
9 657
2 633
Printing (including the reproduction of recorded media)
2 246
9 183
4 034
Petroleum and coal product manufacturing
627
25 590
1 584
Basic chemical and chemical product manufacturing
3 625
30 482
8 393
Polymer product and rubber product manufacturing
2 764
16 078
5 390
Non-metallic mineral product manufacturing
2 689
17 197
5 411
Primary metal and metal product manufacturing
4 585
59 188
6 844
Fabricated metal product manufacturing
5 820
28 656
10 510
Transport equipment manufacturing
5 350
30 431
8 448
Machinery and equipment manufacturing
6 299
33 653
10 575
Furniture and other manufacturing
1 445
7 296
2 495
Total Manufacturing
51 853
381 165
96 809

(a) Classified according to the Australian and New Zealand Standard Industrial Classification (ANZSIC), 2006 edition (1292.0).
(b) Includes capitalised wages and salaries. Excludes the drawings of working proprietors.
(c) Includes rent, leasing and hiring income.
Source: Australian Industry, 2009–10 (8155.0)


Capital expenditure

Overall, capital expenditure by the Manufacturing industry decreased by $4.1 billion (20%) between 2008–09 and 2009–10 (table 20.5).

Ten of the fifteen Manufacturing industry components recorded decreases in capital expenditure in this period. The largest falls in percentage terms were in Furniture and other manufacturing (55%), Petroleum and coal product manufacturing (46%) and Printing (43%). In absolute terms, the Primary metal and metal product manufacturing industry expended $1.7 billion less in 2009–10 than the previous year.

The largest increases in percentage terms were Polymer product and rubber product manufacturing (44%), Textile, leather, clothing and footwear manufacturing (26%) and Food product manufacturing (21%). In absolute terms, the Food product manufacturing industry saw the greatest increase between 2008–09 and 2009–10 ($0.5b).

Industries contributing most to total Manufacturing industry capital expenditure in 2009–10 were Food product manufacturing and Primary metal and metal product manufacturing (both 17%), and Beverage and tobacco product manufacturing (11%).

20.5 MANUFACTURING INDUSTRY(a), Capital expenditure
2008–09
2009–10
Change from 2008–09 to 2009–10
Subdivision contribution to total manufacturing 2009–10
ANZSIC Subdivision
$m
$m
%
%

Food product manufacturing
2 403
2 914
21.3
17.4
Beverage and tobacco product manufacturing
2 968
1 898
–36.1
11.3
Textile, leather, clothing and footwear manufacturing
^288
^364
26.4
2.2
Wood product manufacturing
^499
^564
13.0
3.4
Pulp, paper and converted paper product manufacturing
515
537
4.3
3.2
Printing (including the reproduction of recorded media)
*1 193
^676
–43.3
4.0
Petroleum and coal product manufacturing
897
485
–45.9
2.9
Basic chemical and chemical product manufacturing
1 238
1 234
–0.3
7.4
Polymer product and rubber product manufacturing
413
^596
44.3
3.6
Non-metallic mineral product manufacturing
1 109
868
–21.7
5.2
Primary metal and metal product manufacturing
4 621
2 902
–37.2
17.3
Fabricated metal product manufacturing
^1 501
^952
–36.6
5.7
Transport equipment manufacturing
1 137
^1 084
–4.7
6.5
Machinery and equipment manufacturing
*1 698
*1 528
–10.0
9.1
Furniture and other manufacturing
^380
^170
–55.3
1.0
Total Manufacturing
20 862
16 772
–19.6
100.0

^ estimate has a relative standard error of 10% to less than 25% and should be used with caution
* estimate has a relative standard error of 25% to 50% and should be used with caution
(a) Classified according to the Australian and New Zealand Standard Industrial Classification (ANZSIC), 2006 edition (1202.0).
Source: Australian Industry, 2009–10 (8155.0).


Operating profit before tax (OPBT)

OPBT is a measure of profit before extraordinary items are brought to account and prior to the deduction of income tax and appropriations to owners (e.g. dividends paid). The OPBT for total manufacturing decreased by $2.8 billion (or 10%) between 2008–09 and 2009–10 (table 20.6).

OPBT for nine of the fifteen industry components was lower in 2009–10 than 2008–09. The largest falls, in percentage terms, occurred in Primary metal and metal product manufacturing (down 82%) and Transport and equipment manufacturing (down 42%). In absolute terms, the OPBT of Primary metal and metal product manufacturing fell most ($3.1b).

The manufacturing industries with the biggest gains in OPBT in 2009–10 included Petroleum and coal product manufacturing, which turned a $633 million loss in 2008–09 into a $609 million gain in 2009–10, Textile, leather, clothing and footwear manufacturing (up 74%) and Beverage and tobacco product manufacturing (up 39%).

Industries contributing most to total Manufacturing industry OPBT in 2009–10 were Food product manufacturing (17%), Beverage and tobacco product manufacturing (16%) and Basic chemical and chemical product manufacturing (14%).


20.6 MANUFACTURING INDUSTRY(a), Operating profit before tax
2008–09
2009–10
Change from 2008–09 to
2009–10
Subdivision contribution to total manufacturing 2009–10
ANZSIC Subdivision
$m
$m
%
%

Food product manufacturing
3 645
4 259
16.8
17.2
Beverage and tobacco product manufacturing
2 771
3 855
39.1
15.5
Textile, leather, clothing and footwear manufacturing
^413
^718
73.8
2.9
Wood product manufacturing
^1 067
*955
–10.5
3.8
Pulp, paper and converted paper product manufacturing
^412
^275
–33.3
1.1
Printing (including the reproduction of recorded media)
^958
^876
–8.6
3.5
Petroleum and coal product manufacturing
–633
609
196.2
2.5
Basic chemical and chemical product manufacturing
3 655
3 528
–3.5
14.2
Polymer product and rubber product manufacturing
^1 106
^1 467
32.6
5.9
Non-metallic mineral product manufacturing
1 536
1 275
–17.0
5.1
Primary metal and metal product manufacturing
3 747
**672
–82.1
2.7
Fabricated metal product manufacturing
^4 060
^2 706
–33.3
10.9
Transport equipment manufacturing
*1 188
*689
–42.0
2.8
Machinery and equipment manufacturing
^3 241
^2 324
–28.3
9.4
Furniture and other manufacturing
*506
^625
23.5
2.5
Total Manufacturing
27 673
24 832
–10.3
100.0

^ estimate has a relative standard error of 10% to less than 25% and should be used with caution
* estimate has a relative standard error of 25% to 50% and should be used with caution
** estimate has a relative standard error greater than 50% and is considered too unreliable for general use
(a) Classified according to the Australian and New Zealand Standard Industrial Classification (ANZSIC), 2006 edition (1292.0).
Source: Australian Industry, 2009–10 (8155.0).


State and territory distribution of activity

Graph 20.7 shows the manufacturing production contribution of states and territories (as measured by total factor income) to total manufacturing in 2009–10. New South Wales and Victoria continued to be the largest contributors to manufacturing production, accounting for 32% ($35b) and 28% ($30b) respectively.

Graph 20.7 MANUFACTURING PRODUCTION(a), STATE AND TERRITORY CONTRIBUTION—2009–10



Employment and earnings

The number of male and female workers in each Manufacturing industry component for 2009–10 and 2010–11 is provided in table 20.8.

In 2010–11, the Manufacturing industry employed 9% (991,800) of all people employed in Australia (11,354,500). Males outnumbered females by a ratio of nearly 3 to 1 (74% males and 26% females).

The largest employers of males in 2010–11 were Food product manufacturing (127,500) and Machinery and equipment manufacturing (90,500). The largest employers of females were Food product manufacturing (76,500) and Textile, leather, clothing and footwear manufacturing (29,300).


20.8 MANUFACTURING INDUSTRY(a), Employment(b)
2009–10
2010–11


Males
Females
Persons
Males
Females
Persons
ANZSIC Subdivision
'000
'000
'000
'000
'000
'000

Food product manufacturing
122.0
77.1
199.1
127.5
76.5
203.9
Beverage and tobacco product manufacturing
20.3
9.0
29.4
18.4
7.0
25.4
Textile, leather, clothing, and footwear manufacturing
18.4
28.1
46.5
15.3
29.3
44.6
Wood product manufacturing
40.5
5.5
46.0
32.8
4.6
37.4
Pulp, paper and converted paper product manufacturing
12.6
5.8
18.4
14.3
4.9
19.2
Printing (including the reproduction of recorded media)
37.4
14.5
51.9
41.6
14.1
55.7
Petroleum and coal product manufacturing
5.1
1.1
6.1
7.2
1.2
8.4
Basic chemical and chemical product manufacturing
26.7
21.0
47.7
28.2
15.6
43.9
Polymer product and rubber product manufacturing
24.5
9.4
34.0
24.3
8.3
32.5
Non-metallic mineral product manufacturing
30.6
6.2
36.8
32.9
4.1
37.0
Primary metal and metal product manufacturing
73.3
10.9
84.2
81.0
11.9
92.9
Fabricated metal product manufacturing
52.8
9.5
62.4
45.5
8.9
54.5
Transport equipment manufacturing
72.1
12.9
85.0
75.9
14.0
89.9
Machinery and equipment manufacturing
96.1
28.2
124.4
90.5
26.4
116.8
Furniture and other manufacturing
46.3
11.3
57.6
41.7
11.7
53.4
Manufacturing, n.f.d.(c)
57.6
18.6
76.3
57.6
18.7
76.3
Total Manufacturing
736.3
269.1
1 005.8
734.7
257.2
991.8

(a) Classified according to the Australian and New Zealand Standard Industrial Classification (ANZSIC), 2006 edition (1292.0).
(b) Annual average of quarterly data. Some individual quarterly estimates are subject to sampling variability too high for most practical purposes.
(c) Not further defined. Insufficient detail collected from survey respondent to allocate them to a specific industry code.
Source: Labour Force Australia, Detailed, Quarterly (6291.0.55.003).


Table 20.9 presents information on average weekly earnings (ordinary time earnings plus overtime earnings) of employees in the Manufacturing industry compared with all industries. Between May 2001 and May 2011, the average weekly earnings of all employees in the Manufacturing industry increased by $373 (49%). This was higher in dollar terms than the increase of $353 (53%) for all industries, though slightly lower in percentage terms.

In the Manufacturing industry, the earnings of both male and female full-time employees increased by a similar proportion between May 2001 and May 2011 (56% and 55% respectively). However, the increase in dollar terms for male employees was higher than for female employees ($475 compared with $369). Female earnings in the Manufacturing industry remain well below those of males – with a difference in average weekly full-time earnings of $291 at May 2011.


20.9 MANUFACTURING INDUSTRY, Average weekly earnings(a)(b)—May
All employees
Full-time employees


2001
2011
Change from
2001 to 2011
2001
2011
Change from
2001 to 2011
$
$
%
$
$
%

Males
Manufacturing
817.40
1 243.9
52.2
855.70
1 330.3
55.5
All industries
789.40
1 236.5
56.6
923.40
1 472.8
59.5
Females
Manufacturing
579.40
823.80
42.2
670.50
1 039.1
55.0
All industries
524.70
729.80
39.1
750.60
1 167.1
55.5
Persons
Manufacturing
756.70
1 129.8
49.3
815.10
1 269.4
55.7
All industries
662.60
1 015.2
53.2
861.00
1 357.9
57.7

(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.
(b) The actual reference period is the last pay period ending on or before the third Friday of the middle month of the quarter.
Source: Average Weekly Earnings, Australia (6302.0).


Research and experimental development (R&D)

The Organisation for Economic Co-operation and Development (OECD) defines R&D as comprising “... creative work undertaken on a systematic basis in order to increase the stock of knowledge, including knowledge of man, culture and society, and the use of this stock of knowledge to devise new applications.” R&D includes basic research, applied research and experimental development. Information on R&D expenditure by type of activity for the Manufacturing industry can be found in chapter 26 RESEARCH AND INNOVATION.

Total business expenditure on R&D by the Manufacturing industry decreased by $158 million (4%) between 2008–09 and 2009–10 (table 20.10). Industries contributing the most to manufacturing R&D expenditure in 2009–10 were Machinery and equipment manufacturing (23%), Transport equipment manufacturing (21%) and Basic chemical and chemical product manufacturing (15%).

The Manufacturing industry contributed 25% to total business expenditure on R&D in both 2008–09 and 2009–10.


20.10 MANUFACTURING INDUSTRY(a), Business R&D expenditure(b)

2007-08
2008-09
2009-10
ANZSIC Subdivision
$m
$m
$m

Food product manufacturing
368.9
389.4
427.8
Beverage and tobacco product manufacturing
48.0
58.1
49.0
Textile, leather, clothing and footwear manufacturing
33.0
35.0
np
Wood product manufacturing
51.3
57.1
57.5
Pulp, paper and converted paper product manufacturing
71.1
53.8
np
Printing (including the reproduction of recorded media)
19.7
22.8
31.0
Petroleum and coal product manufacturing
106.7
100.7
77.5
Basic chemical and chemical product manufacturing
612.5
701.5
619.0
Polymer product and rubber product manufacturing
114.2
113.0
110.3
Non-metallic mineral product manufacturing
116.3
112.5
145.3
Primary metal and metal product manufacturing
617.3
649.9
438.2
Fabricated metal product manufacturing
176.7
168.5
188.4
Transport equipment manufacturing
1 021.9
876.2
867.3
Machinery and equipment manufacturing
992.9
1 010.1
975.3
Furniture and other manufacturing
23.3
28.5
30.6
Total Manufacturing
4 373.6
4 377.0
4 218.6

np not available for publication but included in totals where applicable, unless otherwise indicated
(a) Classified according to the Australian and New Zealand Standard Industrial Classification (ANZSIC), 2006 edition (1292.0).
(b) Includes capital and current expenditure.
Source: Research and Experimental Development, Businesses, Australia (8104.0).


Of total business expenditure on R&D in 2009–10, 5% was Capital expenditure, 41% Labour costs and 53% Other current expenditure (table 20.11). The Machinery and equipment manufacturing industry contributed the most in each cost category, with Transport equipment manufacturing next highest in each category.

As a proportion of total business expenditure on R&D, the Manufacturing industry accounted for 31% of Capital expenditure, 27% of Labour costs and 23% of Other current expenditure.


20.11 MANUFACTURING INDUSTRY(a), Type of business expenditure on R&D—2009–10

Capital expenditure
Labour costs
Other current expenditure
Total
ANZSIC Subdivision
$m
$m
$m
$m

Food product manufacturing
25.2
193.4
209.1
427.8
Beverage and tobacco product manufacturing
4.5
21.2
23.3
49.0
Textile, leather, clothing and footwear manufacturing
np
14.0
10.1
np
Wood product manufacturing
1.0
13.6
42.9
57.5
Pulp, paper and converted paper product manufacturing
np
36.7
np
np
Printing (including the reproduction of recorded media)
np
14.3
np
31.0
Petroleum and coal product manufacturing
6.7
21.6
49.1
77.5
Basic chemical and chemical product manufacturing
23.9
221.9
373.1
619.0
Polymer product and rubber product manufacturing
10.1
65.8
34.4
110.3
Non-metallic mineral product manufacturing
6.7
32.6
106.0
145.3
Primary metal and metal product manufacturing
27.6
64.3
346.3
438.2
Fabricated metal product manufacturing
12.6
74.8
101.0
188.4
Transport equipment manufacturing
29.8
459.7
377.8
867.3
Machinery and equipment manufacturing
58.2
499.2
417.9
975.3
Furniture and other manufacturing
3.9
17.3
9.4
30.6
Total Manufacturing
222.5
1 750.6
2 245.5
4 218.6

np not available for publication but included in totals where applicable, unless otherwise indicated
(a) Classified according to the Australian and New Zealand Standard Industrial Classification (ANZSIC), 2006 edition (1292.0).
Source: Research and Experimental Development, Businesses, Australia (8104.0).


PRICE INDEXES

The ABS compiles two price indexes relating to the Manufacturing industry – the price index of materials used in manufacturing industries and the price index of articles produced by manufacturing industries. Information on recent trends in the prices of materials used and articles produced in individual manufacturing industries is provided in the section Producer price indexes in chapter 29 PRICES.

INTERNATIONAL TRADE

The Manufacturing industry is a significant component of Australia's value of goods exports by industry of origin, accounting for 34% of total exports in 2010–11 (table 20.12). The value of manufacturing exports was 12% higher in 2010–11 than in 2005–06. However, the Manufacturing industry share of total value of goods exports has been decreasing over this period, in particular, falling significantly between 2007–08 and 2008–09. For an explanation of factors (including movements in the exchange rate) affecting Australia's international investment position, see chapter 31 INTERNATIONAL ACCOUNTS AND TRADE.


20.12 VALUE OF MERCHANDISE EXPORTS OF GOODS, By industry of origin(a)
Manufacturing
All industries
Manufacturing share of total exports
$m
$m
%

2005–06
74 898
152 492
49.1
2006–07
85 141
168 099
50.6
2007–08
88 260
180 857
48.8
2008–09
92 279
230 829
40.0
2009–10
79 799
200 720
39.8
2010–11
84 068
244 595
34.4

(a) On a free-on-board basis.
Source: ABS data available on request, International Trade.


Graph 20.13 shows the five main destinations, by value, for manufacturing commodities exported from Australia during the period 2005–06 to 2010–11. Of these, the key destinations in 2010–11 were New Zealand ($7.1b), Japan ($6.3b) and the United States of America ($5.3b).

Graph 20.13 Manufacturing exports, Main destinations


For each of the years 2005–06 to 2010–11, at least 85% of Australia's total value of goods imports was for manufactured goods (table 20.14). The value of Australia's imports of manufactured goods has increased 20% over this period, from $152 billion to $182 billion.


20.14 VALUE OF MERCHANDISE IMPORTS OF GOODS, By industry of origin(a)
Manufacturing
All industries
Manufacturing share of total imports
$m
$m
%

2005–06
151 617
167 048
90.8
2006–07
161 866
179 158
90.3
2007–08
179 679
201 184
89.3
2008–09
195 366
220 657
88.5
2009–10
179 299
203 775
88.0
2010–11
182 321
213 221
85.5

(a) Customs value.
Source: ABS data available on request, International Trade.


Graph 20.15 shows the value of manufacturing commodities imported from five selected countries to Australia in the period 2005–06 to 2010–11. From 2005–06, China (excludes SARs and Taiwan) overtook the United States of America as the country providing the largest value of imports, with a 77% growth (from $23b to $41b) between 2005–06 and 2010–11. In contrast, the value of imports from the USA rose only 2% over this period.

Graph 20.15 Manufacturing imports(a), Selected countries



More detailed information on trade in manufactured commodities can be found in the next section.

 

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Statistics contained in the Year Book are the most recent available at the time of preparation. In many cases, the ABS website and the websites of other organisations provide access to more recent data. Each Year Book table or graph and the bibliography at the end of each chapter provides hyperlinks to the most up to date data release where available.


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