For the sixth consecutive month the Australian Industry Group’s Australian PMI (Performance Manufacturing Index) has shown an increase in points to 59.9 in March. This demonstrates the prosperity for the manufacturing sector to have a strong recovery from the COVID-19 pandemic. Here are some of the highs and lows the manufacturing sector are facing through COVID-19.
The Australian Performance of Manufacturing Index (Australian PMI) is a seasonally adjusted national composite index based on the diffusion indices for production, new orders, deliveries, inventories and employment with varying weights. An Australian PMI reading above 50 points indicates that manufacturing is generally expanding; below 50, that it is declining.
Coming in at 59.9 in March 2021, this is manufacturing’s highest level since March 2018.
“The strong recovery in Australian manufacturing gathered further pace in March, with growth across the full range of sectors,” said Ai Group Chief Executive Innes Willox.
He went on to say, “the machinery & equipment sector benefited from higher demand from across the industrial, mining and agricultural sectors, while the metal products and building equipment sectors supplied into healthy levels of residential construction and infrastructure activity.”
Despite vaccinations being rolled out across Australia and the rest of the world, the manufacturing sector is still facing some challenging roads ahead.
As skilled workers continue to be in high demand, and government aids such as JobSeeker and JobKeeper come to a halt, the challenge is to maintain momentum with less financial aid. As Willox added, “the challenge is in the next couple of months…while COVID-19 remains a threat.”
With the end of the JobKeeper wage subsidy and the demise of the coronavirus JobSeeker dole payment supplement, the Treasury estimates up to 150,000 people could be out of work as a result.
In addition to this, the COVID-19 pandemic was a shocker for apprentices in Australia, with the pandemic hitting apprenticeship starts and completions hard.
Data from the National Centre for Vocational Education Research (NCVER):
The number of Australians employed in manufacturing is at an all-time low with the sector accounting for 6.7 percent of jobs compared to 17 percent in the 1980s.
Anthony Albanese, the leader of the Labor Party, on Tuesday promised to establish a $15 billion “national reconstruction fund” if victorious at the next general election.
His aim is to “be globally competitive when it comes to innovation and technology.”
“Building new industries and boosting our existing industries represents an opportunity for Australia to recover from the COVID pandemic with a stronger economy.”
“If there is anything that COVID has taught us, it is the need for Australia to be a place which makes things – to have our own industrial and manufacturing capabilities, our own sovereign capabilities.”
Despite several setbacks facing the manufacturing sector, the pandemic has also changed the nations misconceptions on the industry.
Shay Chalmers is owner of Strategic Engineering Australia, a company that works with organisations to help achieve their strategic goals through strategic planning and development services, process re-engineering and project and program management.
She has seen the shift in conceptions towards the manufacturing sector first hand.
“As a nation, we watched our manufacturing community band together to produce critical medical supplies. They pivoted at lightning speed and supported the nation. It has been phenomenal to watch the general public’s support of Australian Made products over the past 12 months.
The growth that has resulted in many of our manufacturing sectors gaining support from their communities which makes me optimistic that people are starting to see manufacturing, for what it is. A supportive, innovative, agile sector that is here to support the Australian community in our time of need – and this is really exciting.”