Australia’s Manufacturing Crisis

The Manufacturing Industry is facing its most acute crisis since the Great Depression. The downturn in domestic manufacturing is driven by the unintended side effects of the mining boom: a high dollar, high input prices and soaring labour costs. These factors are hurting manufacturing firms trying to export their goods to the world and makes it hard to remain competitive against cheap imports from countries that aren’t ‘blessed’ with a mining boom. All these factors have lead to one thing: a dangerous drop in demand and for Australian made manufacturing goods.

Australia faces the very real threat of Dutch disease in its economy, where the entire economy is geared to the speed of the booming resources sector, leaving behind everyone else. We risk becoming overly dependant on the cash generated by exporting minerals to China and India – a model that leaves us highly exposed to global shocks. The immediate, short-term market forces of this sudden boom have stripped capital, investment and labour from all other sectors, leading to a hopelessly lop-sided economy. The long term consequences are fightening: they will leave Australia without income and jobs, as whole industries are destroyed.

The reality is Australia will need manufacturing jobs during and after the mining boom. The resources sector is a capital-intensive industry that – while similar in size as a percentage of GDP – employs only 20% of the one million people employed in the manufacturing sector. The mining sector can never hope to replace the jobs lost in the manufacturing sector over the course of the boom. Manufacturers find themselves squeezed to breaking point. Unless something is done, many will go out of business. Right now, what Australia’s one million manufacturing workers most want to hear is that the Federal Government has a plan for the future of their jobs and industries. Manufacturing makes an invaluable contribution to training, research and development, employment in other sectors and local communities.

Graphs Proving Our Point

The mining industry has millions of dollars to spend on developing bar charts and fancy graphs that prove their point. Well, two can play at that game. Here is a graph that irrefutably proves our point.

It even has a footnote to add credibility1.



Australia’s mining boom is a once in a generation occurrence. Let’s not let this boom destroy perfectly good jobs. Because once the factories are gone, they’re not coming back. That’s the real story. Take the Jobs Test now!