Australian manufacturers have rebounded strongly from the pandemic, but labour supply pressures are inhibiting future growth.
The Australian Industry Group’s annual Manufacturing in Australia report showed the sector grew by 2.8 percent in 2023 and increased profits by the same percentage.
The report found Australian manufacturing was consolidating into more competitive sub-industries, like food and beverages and metals production, which have grown, while petrochemicals, machinery and other manufacturing have declined.
It said the industry contributed $30.8 billion of value-add to the Australian economy last year, but the manufacturing share of GDP continued to decline, from 6.8 percent to 5 percent over the past decade.
Cost pressures hit the sector due to the recent period of inflation, but manufacturing had also enjoyed buoyant sales price growth and margins had improved since the pandemic.
It stated labour supply was the most acute pressure on Australian manufacturing, with job vacancies at record rates, job turnover growing, and wages growth at a 16-year high.
The report found manufacturing companies had been successful in reducing the gender pay gap, which had fallen from 16.8 percent to 11.2 percent in a decade, however, workforce gender composition was proving slow to change.
