The Australian clothing industry: competition, productivity and scale

Abstract

SUMMARY There has been substantial change in the Australian clothing industry over the last 20 years. Forms of restructuring in the industry include both the re‐emergence of outworking and subcontracting, and locational changes (decline in inner metropolitan areas, perhaps offset by outworking, but relative growth in other regions). The total turnover has slightly increased whereas employment has declined sharply. The changes in employment and output have led to major growth in labour productivity and in capital intensity. Yet labour productivity growth may not be the outcome of significant technical change: productivity growth is sometimes the result of plant closure; the formal social relations of outworking may permit plants to capture some of the profits produced by subcontractors. In any event, there is no evidence of improvements in total factor productivity in the clothing industry. Despite popular conceptions, the clothing industry has been able to achieve high rates of profit. Thus, the prices ch...