A turbulent year for manufacturing, with high volume product demands and domestic and international exporting delays the industry has experienced peaks and troughs during the COVID-19 pandemic.
The manufacturing sector has suffered some of the deepest scars from the coronavirus recession with job numbers still well short of their pre-virus levels.
Although, production and employment returned to positive territory after a significant bounce back in late 2020. IHS Markit Chief Economist, Chris Williamson, describes the December recovery as “one of the strongest upturns in production since 2018.”
The Morrison government is sinking $1.5 billion over the next 4 years into its “modern manufacturing strategy” in what it says is a program aimed at revitalising a source of “high-wage jobs, valuable exports and national income”. It will focus on resources technology, food and beverages, medical products, recycling, defence and space.
While supply chain delays and shipping problems continue to plague the industry, the Australian marketing economy is sporting a 3-year record high in terms of IHS Markit Manufacturing Purchasing Managers’ Index (PMI®) growth from 2018 to 2020.
Despite the overall improvement in order book inflows due to the easing of restrictions in Australia at the later part of 2020, the gain is largely contained within the domestic market.
Analysts attribute a decline in export data to worsening trade tensions with China, alongside a marked deterioration of shipping conditions.
Williams adds, “in balance, however, expectations were reined in slightly compared to November due to increased concerns that the pandemic will stretch further into 2021 than previously thought, and the possibility of escalating trade tensions.”