The diminished capacity of Australian manufacturers to invest in capital and innovation will severely impede the industry’s ability to revive itself to a position as a strong contributor to Australian GDP.
Mark Phillips, National Head of Manufacturing at Grant Thornton Australia said it was critical that the productive capacity and capability of the automotive sector, and manufacturing in general, is preserved. The Government should be focused on redirecting this capability rather than resigning itself to market forces.
Industry requires incentives that foster growth to meet the future needs of the sector. The budget released by the government however, is reliant on induced private sector investment, for which programme design is yet to be finalised.
The turnaround in manufacturing growth in advanced economies is demonstrating that GDP is positively related to growth in manufacturing.
Mr Phillips explains that manufacturing is essential to the long-term health of economies, as it is the engine that drives innovation. He adds that the Australian manufacturing sector contributes significantly more to innovation than other industry sectors.