The shift in China’s economy from the manufacturing sector to the services sector could see a major resurgence of Australia’s manufacturing sector according to a report released by ANZ.
Australia’s manufacturing sector could generate an additional $75 billion worth of exports by 2030 according to the report titled Australian Made.
The report found Australia's food and beverage manufacturing sector to be the strongest due to its ability to produce quality food on a large scale.
This subsector reached $25 billion in value in 2016.
“Export destinations of Australian manufactured goods haven’t changed dramatically since 1990 - Asia’s still our top market," ANZ general manager of regional business banking Christine Linden said.
"Demand from the emerging middle class for high-quality goods has seen our manufactured exports to China rise in value from $1.4 billion in 2000 to more than $8 billion in 2015,” she said.
Linden said Australian manufacturers needed to build efficiency through technology and scale if it is to realise this growth opportunity.
"[It needs to] integrate itself in the regional Asia supply chain and use Australia’s intellectual property as a competitive advantage,” she said.
Manufacturing is Australia’s fifth largest sector, contributing 6.1% of gross domestic product and employing more than 900,000 people.
By 2030, manufactured exports to China will increase across all goods, including $1.7 billion (a 55 per cent increase) in processed primary goods such as food, fibres and minerals, according to the report.
Challenges include global competitiveness, labour costs and skills shortages, a range of high input costs (including energy), overall productivity challenges and determining ways to stimulate further investment in research and development.
Linden said Australia’s proximity and positive trade relationships in Asia only strengthen Australia’s viability as a manufacturer of high quality goods.
