1301.0 - Year Book Australia, 2012
ARCHIVED ISSUE Released at 11:30 AM (CANBERRA TIME) 24/05/2012
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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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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.
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%).
(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).
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%.
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).
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%).
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%).
2009–10
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.
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).
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.
2001 to 2011
2001 to 2011
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.
(a) Classified according to the Australian and New Zealand Standard Industrial Classification (ANZSIC), 2006 edition (1292.0).
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.
(a) Classified according to the Australian and New Zealand Standard Industrial Classification (ANZSIC), 2006 edition (1292.0).
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.
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).
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.
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.
More detailed information on trade in manufactured commodities can be found in the next section.