‘Manufacturing: A Moment of Opportunity’ is manufacturing poised for a recovery?

https://www.theguardian.com/business/2017/jun/21/australias-manufacturing-industry-on-rebound-report-says

  • Report says Australian manufacturing jobs have swelled by 40,000 in the past 12 months, the second-largest number of new jobs created in any industry – and productivity has returned to near its previous peak
  • Since 2008, manufacturing sector’s real output has declined by 13% (compared to its pre-financial crisis peak), and employment by a similar proportion, but the industry appears to have stabilised and remains one of Australia’s most important
  • In the past 12 months, trend employment data from the ABS show there has been an increase of 40,000 manufacturing jobs, surpassed only by public administration and safety jobs (80,000 new positions)
  • The report says since 2014, profits have begun to regain some of the ground lost during the GFC and soaring appreciation of the currency.
  • The report also says the value of Australian-made manufacturers sold to international markets has also grown dramatically in recent years, from a low of $80bn in 2009 to a record high of more than $100bn in the past 12 months
  • Recent data also indicates the sector allocates almost 5% of it sector value-added to R&D expenditure, more than any other sector.
    • Presents an important political opening for leaders to recommit to manufacturing and grant the sector greater priority in economic policy-making

Skeptics:

  • Some sight this prediction as a ‘dead cat bounce’
  • In share markets, a ‘dead cat bounce’ is a temporary recovery from a prolonged decline or a bear market that is followed by the continuation of the downtrend.
  • Frequently, downtrends are interrupted by brief periods of recovery, or small rallies, when prices temporarily rise — normally a result of traders/investors closing out short positions or buying on the assumption that the security has reached a bottom
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