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Sydney beats Melbourne as biggest manufacturing centre

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Sydney has overtaken Melbourne as Australia’s major manufacturing centre, according to research by SGS Economics and Planning.

The SMH reports that Melbourne has long held the title as the nation’s largest manufacturing centre. But, according to the report into GDP by major capital city, Sydney’s manufacturing industry was worth $21.7 billion in 2012-13, while Melbourne's was worth $18.9 billion.

According to Terry Rawnsley, Principal at SGS, the change can be partly explained by the fact that Victoria's manufacturing sector includes large-scale, export-oriented manufacturers such as auto makers. Such businesses have been greatly disadvantaged by the high Australian dollar and competition from Asia.

On the other hand, Sydney has more businesses involved in high-tech manufacturing such as biotechnology and advanced electronics. And more of them sell their products to the domestic market, rather than export.

The research revealed over half of Australia's population was living in a region with falling income per capita during 2012 - 2013. Perth, Victoria, Brisbane, Adelaide and Tasmania all fell into that category.

According Rawnsley, this helps to explain why consumer and business confidence has been so weak. National growth remains quite good, but it is driven by the mining sector which is located out of major population centres and away from where most businesses are located.

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