With the manufacturing business contributing over $100 Billion a year to the Australian economy, over 10% of Australia’s workforce belongs to this industry according to Manufacturing Monthly.
With such a large industry spread across and within multiple other industries, the possibility of a manufacturing boom within Australia is great news for local businesses and the local economy alike.
Why is manufacturing on the rise?
Innovation Australia states that there has been an upward spike in Australian manufacturing jobs, with over 900,000 this month alone. In addition, they suggest that not only are international brands located in Australia benefitting, but also homegrown Australian manufacturers who initially struggled to pivot during the beginning of the COVID-19 pandemic. Manufacturers have now seen massive growth, especially within strategic industries such as space and medical.
One of the key reasons for this growth is government funding, with a recent press release from Acting Minister for Industry, Science and Technology, Angus Taylor disclosing the intention of the government to invest $1.5 billion through a Modern Manufacturing Strategy to aid the road to recovery for the local economy.
“This is the first time manufacturing employment has been above 1 million jobs since 2009 and highlights the importance of our fair deal on energy, the gas-fired recovery and our $1.5 billion investment under our Modern Manufacturing Strategy. The Strategy is all about government backing our manufacturers to back themselves. It sends a clear signal to the industry, and businesses are responding.”
This funding has been channelled largely to grow six key areas of manufacturing within Australia, including:
· Medical products
· Recycling & clean energy
· Defence and space
· Resources & technology
· Critical minerals processing
· Food & beverage
With vaccination rates rising and lockdowns winding down, this boom is expected to have a high chance of lasting. Innovation Australia puts this down to the growth being sustained and led by the adoption of artificial intelligence, data analytics and continually changing technologies at the forefront, with a million new jobs in technology alone needed in Australia by 2025 to meet industry demand.
This indicates that the manufacturing sector is gearing up for some long-term growth and could be a leader in re-balancing the local economy.
Final thoughts for buyers and sellers
In his article, Brett Cenkus writes that timing is the most important aspect of making a good deal. He indicates that buyers, sellers, investors, and the like must first recognise when the market is in a boom period.
Always be informed of the nature of the manufacturing industry. Brett states, however, that it is not necessary to watch the market and attempt to predict its future. All you need to know is if the industry is in a solid period of growth.
The smartest move is to keep your ear to the ground, keep an eye on the stock market, and listen to what financial advisor’s are indicating. This will help you ascertain some level of confidence in the buying or selling journey.