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The major source for the statistics used in this section is the Economic Activity Survey (EAS) of employing businesses conducted by the Australian Bureau of Statistics (ABS). This collection is a combination of sample surveys encompassing the manufacturing industry as well as other industries in the economy. Businesses in this collection are classified on the basis of their 'predominant' activity, using the 1993 version of the Australian and New Zealand Standard Industrial Classification (ANZSIC).
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, namely 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.
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 share of national production for the Northern Territory and the Australian Capital Territory were each less than 1%.
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 Australian manufacturing production between them.
Table 18.7 shows the four states in which the manufacturing industry's contribution to state production over time was most significant. The trend for the manufacturing industry's share of the total production in all of these states has been decreasing, even though manufacturing production actually increased over this period. This is because the growth in manufacturing production has been slightly slower than growth in production in other industries in each of these states.
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 in Australia. 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 accounted for the largest proportion of persons employed in the manufacturing industry in both these states.
The largest industry employers in the other states and territories were food, beverage and tobacco manufacturing in Queensland (27%) and Tasmania (31%); machinery and equipment manufacturing in South Australia (33%); metal product manufacturing in Western Australia (21%) and Northern Territory (36%); and printing, publishing and recorded media in the Australian Capital Territory (39%).
Table 18.8 also shows IVA per person employed. In 2000-01 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. 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 sector in Western Australia.
The number of full-time and part-time workers by sex 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 2003, the manufacturing industry employed 12% of all persons employed in Australia. Males outnumbered females by a ratio of almost 3:1 (73% males and 27% females). The vast majority of males employed in the manufacturing industry (94%) were employed full-time. The corresponding proportion for females was considerably lower (71%).
The proportion of people with full-time jobs in manufacturing has fallen slightly over the past 10 years, from 95% for males and 75% for females in May 1993. This is consistent with the decline in the proportion of full-time employment over the same time period for all industries, with male full-time employment falling from 90% to 85% and female full-time employment falling from 58% to 54%.
The largest employers of males were machinery and equipment manufacturing (25%) and metal product manufacturing (17%). The largest employers of females were food, beverage and tobacco manufacturing (21%) and printing, publishing and recorded media manufacturing (18%).
Further information on employed wage and salary earners and the characteristics of the manufacturing labour force is provided in Labour.
Table 18.10 presents information on average weekly total earnings (i.e. ordinary time earnings plus overtime earnings) of employees in the manufacturing industry and all industries. Between May 1984 and May 2003, the average earnings of full-time employees increased by 159% in the manufacturing industry, which was slightly higher than the increase of 149% for all industries. The earnings of both male and female full-time employees in manufacturing increased but the increase for female employees was 22 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 2003 was higher by 28% than female full-time employees. In May 1984, male full-time employees were earning 39% more than female full-time employees. In May 2003, the difference in average earnings between male and female full-time employees was: 31% in food, beverage and tobacco manufacturing ($902 per week for male employees compared to $688 for female employees); 25% in metal product manufacturing ($903 compared to $702); and 23% in machinery and equipment manufacturing ($959 compared to $780). The most highly paid female full-time employees were in the petroleum, coal, chemical and associated product manufacturing and non-metallic mineral product manufacturing with average weekly earnings of $855 and $824 respectively.
Sales and service income
Sales and service income of employing businesses comprises sales of goods whether or not produced by the business (including goods produced for the business on a commission basis) and income from service activities. Service income includes income from work done or sales made on a commission basis, income from repair, maintenance or servicing, advertising income, installation and delivery charges separately invoiced to customers, and management fees/charges received from related and unrelated businesses.
Table 18.11 shows that sales and service income for the manufacturing industry was $252b in 2000-01. Food, beverage and tobacco manufacturing recorded the largest sales income in each of the last six years, accounting for 23% of all sales income earned in the manufacturing industry in 2000-01.
Over the period 1995-96 to 2000-01, income from sales of goods and services increased by 21% for manufacturing as a whole. Manufacturing subdivisions with the largest increases over the period were: petroleum, coal, chemical and associated product manufacturing (33%); food, beverage and tobacco manufacturing (28%); machinery and equipment manufacturing (24%); and wood and paper products manufacturing (24%).
Sales of goods and services in the textile, clothing, footwear and leather manufacturing subdivision decreased by 10% over the 1995-96 to 2000-01 period.
During 2000-01, sales and service income in the manufacturing industry increased overall by 4.8%. The petroleum, coal, chemical and associated product manufacturing subdivision, recorded the largest increase over the year (18%).
In 2000-01, Victoria (with 32% of national manufacturing sales and service income) and New South Wales (with 31%) continued to be the largest manufacturing states (table 18.13). Victoria contributed 49% of the total sales and service income of the textile, clothing, footwear and leather manufacturing industry; 37% of the total sales and service income of the machinery and equipment manufacturing industry; and between 23% and 36% of the total sales and service income of the remaining manufacturing industries. New South Wales contributed 43% of the total sales and service income of the printing, publishing and recorded media industry, and between 26% and 35% of the total sales and service income of the remaining manufacturing industries.
The contributions of the remaining states and territories to manufacturing industries were not as great. Queensland contributed the third largest proportion of total manufacturing sales and service income with 16%. It accounted for 22% of total sales and service income for food, beverage and tobacco manufacturing. Its contributions to other industries were smaller, varying from 7.6% to 19%. South Australia contributed the next largest proportion of manufacturing sales with 9.4%, closely followed by Western Australia (8.6%). The contribution of South Australia to total sales and service income for machinery and equipment manufacturing of 20% was the most prominent compared to its contribution to other industries which varied from 3.9% to 9%. Western Australia accounted for 13% of recorded sales and service income for three industries namely: non-metallic mineral product manufacturing; petroleum, coal, chemical and associated product manufacturing; and metal product manufacturing.
Operating profit before tax
Table 18.13 shows 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% total manufacturing OPBT); food, beverage and tobacco manufacturing (24%); petroleum, coal, chemical and associated product manufacturing (14%); and machinery and equipment manufacturing (12%).
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.
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.
Graph 18.14 shows that 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%. Small businesses employed 24% of the manufacturing work force, but their share of manufacturing activity was much less significant, at around 11%.
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 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%).
As table 18.15 shows, capital expenditure by the manufacturing industry decreased by 5.4% over the period 1995-96 to 2000-01.
A majority of manufacturing 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 $384m). 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).
International trade by industry of origin
Exports by industry of origin
Table 18.16 shows that the manufacturing sector dominates Australia's value of exports by industry of origin, accounting for 57% of total exports in 2002-03. Over the period 1992-93 to 2002-03, the value of manufacturing exports has increased by 75%. However, the share of total value of exports of the manufacturing industry fluctuated, with the trend being slightly down each year since the high of 65% in 1994-95.
Graph 18.17 shows the top five destinations for manufacturing commodities exported from Australia, during the period 1998-99 to 2002-03. The United States of America was the largest destination of Australian manufacturing exports in terms of value, with $7.7b worth exported in 2002-03, down from $9.1b in 2001-02. This was the first decrease in five years for manufacturing exports to the United States of America. Similarly, the value of Australian manufacturing exports to the Republic of (South) Korea decreased by 4.5% to $3.6b in 2002–03 from $3.7b in 2001-02. In 2000-01, manufacturing exports to Japan reached a peak for the period of $8.0b, but the value has since fallen 12% to $7.0b in 2002-03.
The value of manufacturing exports to New Zealand rose 36%, from $5.2b in 1998-99 to $7.0b, in 2002-03. After dropping from $3.5b in 1998-99 to $2.7b in 1999-2000, the value of manufacturing exports to the United Kingdom has increased 69% to $4.6b in 2002-03.
Imports by industry of origin
Table 18.18 shows that the manufacturing sector accounted for over 90% of Australia's value of imports by industry of origin during the period 1993-94 to 2002-03. Over this period, the value of manufacturing imports has increased by 82% compared to the increase of 86% for all industries. The value of mining imports increased by 182%, which accounts for the slightly higher rate of increase for all industries.
Graph 18.19 shows the top five countries for manufacturing commodities imported to Australia, in the period 1993-94 to 2002-03. In each year of this period, Australia imported more manufactured goods from the United States of America than from any other country. In 2002-03, the value of manufactured imports from the United States of America was $21.9b, slightly less than the high of $22.4b imported in 1999-2000. The value of manufacturing imports from the United Kingdom has been relatively stable at around $5.5b to $6.2b since 1997-98, after an increase between 1993-94 to 1997-98 of 52%.
The largest growth has been in manufacturing imports from China. In the period 1993-94 to 2002-03, the increase in value of manufacturing imports from China was 343%, compared to a 62% increase in value of imports from the United States of America, a 56% increase from the United Kingdom, and a 29% increase from Japan.