Australian manufacturing, 1968?1988: Recession, reorganisation and renewal

Abstract

Australian manufacturing developed primarily to supply domestic customers. It played an important role in the country's postwar economic growth, employment increase and rising living standards. However, decades of heavy protection and limited opportunities for achieving scale economies because of the small local market and fragmentation of production across six states were among many factors that meant that by the late 1960s the sector was increasingly ill-equipped to deal with major changes in international and internal economic and political conditions. Over the last two decades, manufacturing has contracted, with employment falling sharply, and there has been a substantial and highly varied restructuring of production, although many past features survive. In the mid 1980s, several factors, most notably a large depreciation of the Australian dollar, have made local manufacturing more cost competitive and created new export opportunities. Nevertheless, many branches of manufacturing remain vulnerable to further rapid rationalisation and future prospects are uncertain.