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1301.0 - Year Book Australia, 2004  
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 27/02/2004   
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Contents >> Manufacturing >> Economic contribution of the manufacturing industry

Production can be measured on a net basis, the value of goods and services produced less the value of inputs (e.g. labour, capital) used in production. In national accounting terms, the contribution of an industry to the overall production of goods and services in an economy is measured by industry gross value added (GVA). Industry GVA sums the gross value added by each producer in the industry.

Graph 18.1 shows total production of the manufacturing industry measured by industry GVA in chain volume terms (i.e. 'real' output unaffected by price change) increased in most years from 1982-83 to 2001-02. Production levels peaked in 1988-89 before dropping back over the next three years to around the level achieved in 1987-88. Since then manufacturing production has continued to increase at an average rate of 2.5% per year.

Graph - 18.1 Manufacturing production


Table 18.2 shows the industry GVA of the broad Australian and New Zealand Standard Industrial Classification (ANZSIC) industry subdivisions which make up the manufacturing industry. The table also shows the contribution the manufacturing industry made to Australia's gross domestic product (GDP). During the period 1997-98 to 2001-02, manufacturing industry GVA rose by 8.9%. The overall growth rate of the economy, however, was higher than the rate of growth of the manufacturing industry, which meant that the contribution manufacturing made to GDP decreased from 11.6% to 10.9% of GDP.

The property and business services industry has been growing at a faster rate than manufacturing, and now accounts for a similar percentage of GDP. According to the Commonwealth Department of Industry Science and Resources:
      ...much of the growth in property and business services over the past twenty years .... has been due to the increasing tendency in recent years for manufacturing firms to outsource many of their non-core activities (Structural Change in Australian Industry, 2001).
The implication being the value of production of some activities traditionally carried out by manufacturing firms themselves, and therefore included as part of the manufacturing industry, has been transferred to the property and business services industry.

Industry GVA rose much more strongly over the period for some manufacturing industry subdivisions than for others. Wood and paper product manufacturing rose by 11% even though there were slight decreases in 1998-99 and 2000-01, while printing, publishing and recorded media increased by 14% and petroleum, coal, chemical and associated product manufacturing rose by 11%. Industry GVA for textiles, clothing, footwear and leather manufacturing decreased by 25% - the only industry subdivision within the sector to record a decrease over the period.

18.2 GROSS VALUE ADDED AND CONTRIBUTION TO GDP, Chain volume measures(a)
Industry subdivision
Units
1997-98
1998-99
1999-2000
2000-01
2001-02
Percentage change from 1997-98 to 2001-02
Industry gross value added
Food, beverage and tobacco manufacturing
$m
13,607
14,086
14,288
14,553
14,483
6.4
Textile, clothing, footwear and leather manufacturing
$m
3,016
3,022
2,942
2,778
2,276
-24.5
Wood and paper product manufacturing
$m
4,909
4,895
5,279
5,116
5,433
10.7
Printing, publishing and recorded media
$m
6,321
6,527
6,726
7,087
7,195
13.8
Petroleum, coal, chemical and associated product manufacturing
$m
9,316
9,447
9,755
10,048
10,348
11.1
Non-metallic mineral product manufacturing
$m
3,530
3,783
3,995
4,097
3,900
10.5
Metal product manufacturing
$m
11,945
12,205
11,683
11,639
12,810
7.2
Machinery and equipment manufacturing
$m
14,154
14,136
14,036
15,341
15,852
12.0
Other manufacturing
$m
2,619
2,702
2,752
2,695
3,276
25.1
Total
$m
69,374
70,749
71,429
73,354
75,573
8.9
Contribution to GDP
%
11.6
11.2
10.9
11.0
10.9
. .
(a) Reference year for chain volume measures is 2000-01.
Source: Australian System of National Accounts, 2001-02 (5204.0).


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