Damon Mcknight
Australia's manufacturing industry has been in decline since the mid-1980s due to trade liberalisation and the reduction of tariffs, which made imports much cheaper. This has resulted in a shift away from manufacturing towards other sectors, such as mining and agriculture. However, it is inaccurate to say that nothing is made in Australia. The country still has a diverse manufacturing sector, including food and beverage, machinery and equipment, and metal products. Additionally, many products are designed and manufactured in Australia, such as electric bikes, sprinklers, and innovative technology.
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What You'll Learn
Decline of the textile industry
The textile industry in Australia has been in decline over the past few years. The Australian Fashion Council (AFC) has warned that the total industry value will decline by 18% with a loss of more than 700 jobs by 2030. This decline has been observed in the Victorian textile, clothing, and footwear (TCF) manufacturing industry, which has shed 18% of its value in the past five years.
The TCF exports were valued at $334 million, nearly $200 million more than Victoria's wine exports. The labour content in the manufacturing sector in 2019 was significantly lower than 20 years ago, and this can be attributed to technological advances and changes in government policies. Government policies have played a significant part in the development of the textile manufacturing industry in Australia. For instance, state governments introduced incentives in the form of grants for manufacturers to produce materials from locally available fibres. The colonial government of Victoria introduced tariffs in 1871 to protect its manufacturing industries from overseas manufacturers and other colonies.
However, changes to import tariffs by the Federal Government in Canberra during the late twentieth century negatively impacted the supply chain of the industry. The supply chain was not fully understood by government members or their advisors. The shift towards digital technology usually means fewer jobs, but this has been found to be the opposite for the textile industry. Technological investment can lead to better, higher-value jobs, lifting the overall wages for the sector.
There has been a rising demand for linen textile products in the market as they are more sustainable and biodegradable. The online home textile market of Australia is also observing changes as more vendors are selling textiles online, and offline retailers are also emerging in the online market. The major export market for Australian home textiles is New Zealand and Singapore, and the export trend has been increasing over the past three years. The Australia Home Textiles Market size is expected to reach USD 5.23 billion in 2025 and grow at a CAGR of 4.56% to reach USD 6.53 billion by 2030.
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Drop in manufacturing jobs
Australia's manufacturing sector has historically been diverse, with significant contributions from industries such as food, beverages, tobacco, machinery, equipment, petroleum, coal, chemicals, and metal products. However, the country has witnessed a decline in manufacturing jobs in specific industries over the years.
One notable example is the textile industry, which flourished until the 1980s due to trade protectionism but declined after trade liberalisation in the mid-1980s. The reduction in tariffs made it more affordable to import goods, and by 2010, most textile manufacturing had shifted to Asia, even for Australian companies. This shift had a significant impact on employment in the industry, which received substantial government assistance until the early 2000s.
Another industry that has seen a reduction in manufacturing jobs is the automotive industry. Car manufacturing was introduced in Australia in the 1920s, with Ford and General Motors opening factories. However, in the late 2000s and early 2010s, several car manufacturers ceased production in Australia, including Mitsubishi, Ford, Holden, and Toyota. This decline in local car manufacturing resulted in job losses in the industry.
While the overall number of manufacturing jobs has decreased, Australia still has a robust manufacturing sector with a diverse range of products. For instance, the country continues to produce innovative technology, such as RØDE's Wireless Go II microphone system and electric bikes. Additionally, the food and beverage industry remains the largest manufacturing sector in Australia, and companies like Tasmanian Alkaloids and GlaxoSmithKline contribute significantly to the pharmaceutical industry. Furthermore, Australia has made strides in the aviation industry, with Incat Tasmania manufacturing the world's largest battery-electric ship in 2025.
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Trade liberalisation
Australia has a history of economic reforms aimed at achieving a more flexible and resilient economy. Trade liberalisation has been an integral part of this agenda, with the country unilaterally, bilaterally, and multilaterally reducing trade barriers and industry protection. This process has been ongoing since the 1970s, with a 30-year trade liberalisation window from 1986 to 2016 being studied for its economic impact.
Australia's economy is relatively open and trade-exposed, meaning that changes in global demand for its goods and services can significantly impact the domestic economy. The country has plentiful natural resources, including large reserves of iron ore, coal, and gas, which have historically made up a sizeable share of its exports.
The terms of trade boom from 2005 to 2011, driven by surging prices for some of these commodity exports, had a profound effect on the Australian economy. Commodity price increases triggered massive investment in the mining sector, which expanded existing mines and developed new ones. This led to the largest resources investment boom in Australian history, with mining investment increasing five-fold from 2004 to 2012, peaking at 9% of GDP.
The large-scale investment in mining, along with higher incomes, increased overall demand in the Australian economy. This resulted in increased labour demand, downward pressure on the unemployment rate, and upward pressure on wages, causing higher inflationary pressures. The Reserve Bank responded by increasing the target for the cash rate. The effects of this were more pronounced in non-mining sectors, such as tourism, which did not directly benefit from higher commodity prices.
Despite the shift away from manufacturing cars, Australia still manufactures a diverse range of products, including electric bikes, sprinklers, earthmoving attachments, and microphones. The country's manufacturing sector remains innovative and adaptable, contributing to a dynamic and resilient economy.
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Manufacturing boom during WWII
Australia experienced a significant manufacturing boom during and after World War II, with the country's industrial sector expanding and diversifying to meet the demands of the war effort and subsequent reconstruction.
The Australian government established the Division of Industrial Development to oversee and support this expansion, with a focus on areas such as rural reconstruction, conversion of munitions factories for peacetime industries, and the development of an Australian car manufacturing industry. This division also worked to improve workforce training and employment opportunities, electricity supplies, fuel production, and industrial technology.
One of the key objectives during this period was the conversion of munitions and armament factories for other industrial uses. This involved repurposing the infrastructure and capabilities developed during the war to produce goods for civilian use, contributing to the diversification of Australia's manufacturing sector.
The country also experienced a boom in car manufacturing, with the government providing direction and support to foster the growth of this industry. This included initiatives to encourage domestic production and assembly of vehicles, as well as the development of supporting industries and infrastructure.
While car manufacturing in Australia has since declined, with vehicles no longer being made on Australian soil, the legacy of the WWII manufacturing boom lives on in other industries. Today, Australia continues to produce a diverse range of products, from electric bikes and sprinklers to earthmoving attachments and components, microphones, and innovative protective equipment like the Magnoshield curtain, designed to shield people and equipment from debris and sparks.
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Current manufacturing diversity
Australia's manufacturing sector is diverse, with the largest sub-industries being food, beverage and tobacco, machinery and equipment, petroleum, coal and chemicals, and metal products. In 2000–2001, the manufacturing industry received $3.3 billion in assistance, with 40% going to the textile, clothing, and footwear industry, and the passenger motor vehicle industry. At that time, manufacturing accounted for 48% of exports and 45% of Australian research and development.
The food and beverage manufacturing industry is the largest in Australia. Many products are made in Australia, from electric bikes and sprinklers to earthmoving attachments and microphones. The Australian Made website lists thousands of products licensed to carry the Australian Made logo, certifying them as genuinely made in Australia. Some examples include the Magnoshield protective curtain, the Tastic Luminate Single 3-in-1 Bathroom Heater, Fan and Light, and the Microsafe range of containers.
Many mining companies, such as BHP and Comalco, perform initial processing of raw materials. Tasmania produces 40% of the world's raw narcotic materials, some of which are locally converted into codeine and other pharmaceuticals by Tasmanian Alkaloids, owned by Johnson and Johnson. GlaxoSmithKline processes some of the resulting poppy straw in Victoria.
Australia has a history of manufacturing diverse products, including the Beaufort, a twin-engined torpedo bomber during World War II, and the first Australian-made bottle of Coca-Cola in 1938. The introduction of car manufacturing in the 1920s saw Ford and General Motors open factories, and in 2006, Holden's export revenue was just under AUD $1.3 billion. However, by 2010, most textile manufacturing had moved to Asia, and car manufacturing had ceased, with Mitsubishi ending production in 2008, followed by Ford, Holden, and Toyota by 2017. Despite these changes, Australia continues to have a diverse manufacturing sector, with many products still made within the country.
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Frequently asked questions
Many products are made in Australia, from electric bikes and sprinklers to earthmoving attachments and microphones. The food and beverage manufacturing industry is the largest in Australia, and the country also produces machinery and equipment, petroleum, coal, chemicals, and metal products.
Some products made in Australia include:
- AFL Goal Posts made from 100% recycled materials
- Magnoshield, a protective curtain that shields people and equipment from debris and sparks
- Tastic Luminate Single 3 in 1 Bathroom Heater, Fan, and Light
- Microsafe containers that are microwave-safe, freezer-safe, and dishwasher-safe
- RØDE’s Wireless Go II, a dual-channel microphone system
Australia has a diverse manufacturing sector, with the largest sub-industries being food, beverage, and tobacco; machinery and equipment; petroleum, coal, and chemicals; and metal products. Mining and agriculture are also important industries, feeding into the chemical industry.
Manufacturing in Australia has gone through periods of boom and decline. There was a boost during World War I due to a lack of imports, and car manufacturing began in the 1920s. The industry experienced another exceptional boom during World War II and the two decades that followed, with assistance from protectionist tariffs. However, starting in the 1980s, tariffs were cut, leading to a decline in industries such as textiles, clothing, and footwear. By 2021, the number of people employed in manufacturing had dropped to 6.2% of the workforce.
