Economic Importance of Manufacturing in Australia

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Manufacturing contributes about six per cent of Australia’s GDP and supports 862,200 jobs. The economic importance of manufacturing in Australia is now fully recognised by government and they are collaborating to create and grow a strong, resilient, thriving and internationally competitive manufacturing industry.

Manufacturing onshore is desirable for the economy providing jobs and expanding the middle-class, while also helping Australia rebuild our supply chains internally to ensure our national security and safety.

Australian manufacturers are moving out of heavily protected production to specialised production. However, we have not yet evolved to a stage where production is geared towards more complex, high value-add manufacturing.

To compete with Asian countries, Australia has highly-skilled manufacturing capabilities that position us to compete on value rather than on cost alone. The key is getting our manufacturers to scale-up. We must encourage more of our manufacturers to make this shift to high-value revenue streams, and retailers to support these manufacturers through this change.

As stated in a report by the Australian Government Department of Industry, Science, Energy and Resources, “[manufacturing] played a critical role in supporting the health response to COVID-19, with our manufacturers able to pivot towards delivering Personal Protective Equipment (PPE) and essential medical equipment. However, Australian manufacturing has declined. While this is a common trend in other advanced economies, our share of manufacturing compares poorly — and we can and must do better.”

We have looked at what we are good at and what we can be good at. It is activities like R&D (research and development), design, logistics, sales and services that better play to Australia’s strengths and will provide further jobs for our community.

This will also provide the right environment for our businesses to capture export opportunities as global demand for high-quality Australian products increases.

Job Maker Hiring Scheme

The JobMaker Hiring Credit scheme is an incentive for businesses to employ additional young job seekers aged 16–35 years. The credit is paid to employers to help subsidise the cost of employing. Eligible employers can access the JobMaker Hiring Credit for each eligible additional employee they hire between 7 October 2020 and 6 October 2021.

This scheme is will promote the business confidence for modern Australian manufacturers to hire new workers and invest for our recovery. Partnering with government through incentives such as ‘JobMaker’, Australia can build a manufacturing capability that delivers positive economic outcomes and jobs for local communities, including in regional areas.


Manufacturing is the most innovation-intensive sector in the whole economy. No country can be an innovation leader without manufacturing.

Manufacturing is one of the major sources of innovation in Australia. While the sector makes up just 8% of the economy, it is responsible for a quarter of all investment in R&D. Innovation and manufacturing are different sides of the same coin. A constant push-pull operates, whereby innovation in product design encourages innovation in manufacturing processes, and vice versa.

Why Manufacturers Need To Invest In Research And Development

Due to the economic importance of manufacturing, through government support, and focusing on utilising our skilled-workers and driving innovation, the Australian manufacturing industry can build a regime that can secure our competitiveness for the future; supporting local families, communities and the overall economy.

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