By Jens Goennemann
Through our usual good fortune as well as good management, Australia is set to successfully navigate its way out of the COVID-19 pandemic. The 2021-22 Budget signals that confidence is returning for households and businesses with the economy projected to grow 1.25 per cent this financial year, rising to 4.25 per cent over the next.
However, this confidence should not be misinterpreted as job done. Certain industries will continue to operate under challenging circumstances for the foreseeable future, with manufacturing doing well – for now.
Almost 12 months from the initial pandemic shock, Australia’s manufacturing industry has rebounded, posting the fastest rates of growth (as measured by the PMI) for over a decade, and more importantly recovering almost all its losses from March 2020 and the preceding two years
While an index showing manufacturing growth is good news, and I am very proud of our industry’s resilience, it hides a growing concern that a ‘busy’ manufacturing industry conceals broader challenges. And these challenges were reinforced for AMGC following our national in-depth discussion series with industry earlier in the year.
In short, the challenges of concern are the same ones that caused a retraction in the market following the manufacturing highs of 2018 (and they were not really highs) centred on leadership, access to capital, adoption of technology, access to skills/training, supply chains issues and market issues – these are the fundamentals that make up competitiveness and resilience leading companies to scale. Yet, these challenges are the brick walls Australian manufacturers ran up against when the luck or favourable conditions dry up – and right now, conditions are favourable.
Right now, manufacturers can take advantage of an economy that is getting back on track. Budget measures announced last night include more investment in apprentices and more training places – this is a start for an industry-led demand driven workforce recovery.
Concurrently, the federal, state and territory governments should increase investment in the pioneering nature of manufacturing. To lock in the high-value jobs and revenue growth trajectories promised by our political leaders.
Let’s double-down on our investment in manufacturing. Be it through new equipment, upskilling staff, engaging in forward planning, or seeking outside assistance to unlock opportunities.
We must not let complacency creep into our fragile, and unpredictable, recovery. It is time to seize the positive conditions and build in greater resilience into Australia’s manufacturing industry while increasing the value and complexity of what we as a trading nation make.
Dr Jens Goennemann is Managing Director of the Advanced Manufacturing Growth Centre.
This article was first published on Linkedin. The original version can be viewed here.