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Australian Advanced Manufacturing Emulates the U.S

11 Jan 13

A recent U.S study has found that their domestic advanced manufacturers are losing market share to foreign competition, an experience that is also evident with Australia’s advanced manufacturers.

The study indicates that’s imports of around 100 advanced manufactured products set a new record by gaining 37.5% of the $2 trillion dollar American market whereas back in 1997 this figure was around 24.4%.

The findings of this study are contrary to upbeat reports about a U.S manufacturing renaissance with high value U.S domestic manufacturing (advanced manufacturing) in decline. Rising import penetration rates in the U.S show that far from a renaissance, the U.S’s most valuable manufacturing sectors collectively are more value to the same foreign competition that doomed less advanced type of manufacturers.

The study also shows that 29 of the 106 advanced manufacturing sectors covered by the study, featured import penetration rates of 50% or more, in 1997 this figure was closer to 8.

If such a study with reliable information was conducted for the Australian advanced manufacturing sector, it is likely that the results could be similar as Australia’s advanced manufacturers battle foreign competition on every front owing not only to the high Australian dollar, but high relative labour costs.

Having said that, Australia’s advanced manufacturing sector is far from dead because of Australia’s global reputation for high quality, the ability to work with tight tolerances, work with exotic materials and short production runs. All of these are factors that still make Australian advanced manufacturing attractive as our nearby Asian competition are not necessarily able to compete on all these fronts, particularly with rising labour costs in China.

A study into Australia’s advanced manufacturing sector, similar to the U.S study, would be interesting to see just to what degree foreign competition has penetrated the local market and to accurately determine the strengths and weaknesses of our local advanced manufacturing market and where we can best compete and therefore concentrate.

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