All is not lost for Australian manufacturing even though big headline companies such as Ford, General Motors, and now Toyota are planning to cease operations in Australia over coming years.
Tim Toohey, Goldman Sachs Australia’s Chief Economist, wrote recently in a note to clients:
there are niche areas of Australian manufacturing (including high-end scientific equipment and specialized machinery) that will continue to buck the broader malaise of Australian manufacturing (Exhibit 29). The forecast decline in the AUD should also provide some relief.
Certainly in this context Toohey’s focus was on manufactured exports not manufacturing per se but the trend toward increased high-tech and niche products is a clear positive for Australian exports at close to 50% of the total of manufactured exports.
Increasingly the global economy seems to be one where the free flow of capital sees it flow to areas where people, companies and countries can exploit their absolute, physical, intellectual and other trading capital advantages or they find it hard to compete with lower cost regimes.
The good news in Toohey’s analysis is that it seems like Australian business is already heading.