Australian Manufacturing Grows Strongly in 2021

Australian Manufacturing Still Going Strong

While we are still working out what the new normal is going to look like as we come to grips with COVID-19 and coming out of lockdown, there has been some good news.
 
Australian Manufacturing has been growing since 2016 and 2021 has seen some of the strongest growth as we finally wake up to the importance of being to make stuff.
 
Whether you want to call it Sovereign Capability, Economic Defensibility, Risk Management or any other synonym term, we can now see that not having local value creation ability in manufacturing is a risk we can’t afford.
 
Borrowing from another source and refactoring it I ended up with this as a definition I was happy with: Sovereign manufacturing capability ‘is the ability to design, build, sustain, upgrade and export Australian made product in Australian manufacturing facilities by Australian workers’. This is adapted from the Australian Parliamentary Report on Naval Shipbuilding Sovereign Capability.
 
In the last 3 months there were 91,000 new jobs created in Australian Manufacturing. Which represents a growth of around 10%.
 
And the Australian Manufacturing PMI (Purchasing Managers Index) is also looking very healthy rising above 60 for several months this year (above 50 = growing, below 50 = shrinking).
 

Australian Manufacturing PMI 2021

Australian Manufacturing PMI 2021

And that is a healthy trend line. August saw a dip back down to slowly growing and interestingly August 2020 was a slight decrease. But the overall trend is excellent.
 
So I’m looking forward to this continuing through the rest of the year and 2022.
 
Successful Endeavours specialise in Electronics Design and Embedded Software Development, focusing on products that are intended to be Made In AustraliaRay Keefe has developed market leading electronics products in Australia for more than 30 years.

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This post is Copyright © 2021 Successful Endeavours Pty Ltd

Australian Manufacturing Growth Continues

Australian Manufacturing PMI

 

Unlike what you are probably hearing from politicians, Australian Manufacturing is one of the current success stories of the Australian economy. Currently the second highest growth sector in Australia, Australian Manufacturing has been in growth every month bar one since mid 2015. Check out the chart below from Trading Economics Australian Manufacturing PMI.


source: tradingeconomics.com

 

Which is really great news for Australia because Australian Manufacturing:

 

  • creates fundamental value
  • creates more indirect jobs around it than any other industry
  • spreads wealth more evenly through the Australian community than any other industry

So jobs, equitable distribution of wealth and a thriving service sector are all better because of local manufacturing.

 

Australian made products

Our focus is on products you can make in Australia. And profitably of course. Some recent examples of Australian made products we have worked on are:

 

 

And quite a few we can’t tell you about yet.

 

Successful Endeavours is a leading economic indicator business. When we get busy, the Australian economy will be going through a lift in 6 to 12 months. And we are very busy right now. Which I am taking as a very good sign.

 

Some additional resources if you want to know more are:

 

Successful Endeavours specialise in Electronics Design and Embedded Software Development, focusing on products that are intended to be Made In AustraliaRay Keefe has developed market leading electronics products in Australia for more than 30 years. This post is Copyright © 2018 Successful Endeavours Pty Ltd.

Australian Manufacturing PMI Grows in 2017

Australian Manufacturing PMI

The PMI, or Purchasing Manager’s Index, is a measure of whether a sector is growing or contracting. Growth is above 50 and contraction is below 50. So here is the last 12 months for Australian Manufacturing shown visually.

 

Australia Manufacturing PMI 2016-2017

Australia Manufacturing PMI 2016-2017

 

This is a continuing trend since mid 2015 and a really good thing for the overall Australian economy.

 

And to top it off, the growth in Australian Manufacturing in August 2017 was the highest since 2002. So really kicking some goals this year.

 

You can read more about it in:

 

 

Successful Endeavours specialise in Electronics Design and Embedded Software Development, focusing on products that are intended to be Made In AustraliaRay Keefe has developed market leading electronics products in Australia for more than 30 years. This post is Copyright © 2017 Successful Endeavours Pty Ltd.

I Nearly Retired

Manufacturing Profits you can retire on

I was talking with one of our past clients a little while ago. They told me they had a problem. They said, “Ray, I nearly retired“! So I asked them what that meant. And they explained.

 

We had developed a product for them a decade ago. The total project cost then around $50,000 as it included both the product Electronics Design, Embedded Software and also the Automated Test Equipment (ATE) for Production Test which also had an Electronics Design, Embedded Software and Windows PC ATE Software component to it. And from that product they made nearly $2,000,000 in retained profit. From their perspective, nearly enough to retire on. And since they own the company it is theirs to distribute as they please. Now they wanted to do it again. So we are onto another very exciting Product Development for them. Can’t say any more about that yet.

 

So I though about the value proposition here. The maths says:

 

2,000,000 / 50,000 = 40:1 Return On Investment (ROI).

 

And that ignores the total value of the economic activity and profits their suppliers and customers have made.

 

Return On Investment (ROI)

Return On Investment (ROI)

Manufacturing Spearheads Economic Growth

The Victorian Government estimates that every $1 spent with a business like Successful Endeavours, there is $100 of overall economic value generated for the state. Makes you wonder why they don’t invest themselves? They used to through things like the Technology Voucher Program but all of that is currently shut down.

 

And of course there are the jobs this generates. Again, Victorian Government estimates are that every job in manufacturing creates another 5 jobs around it in the supply chain and supporting businesses. That is the highest ratio of any industry.

 

So what’s not to love about Australian Manufacturing! Let’s look at the benefits:

 

  • creates fundamental value (so the service sector has something to leverage off)
  • creates jobs and then more indirect jobs than any other industry so it is great for employment
  • creates profits

 

And far from being in decline, the Australian Manufacturing PMI has been in growth most of the past  2 years so that is also really positive for the overall economy. Check out he graph below from the Australian Industry Group (AIG).

 

Australia Manufacturing PMI 2015-2017 shows growth the whole way

Australia Manufacturing PMI 2015-2017 shows growth the whole way

The above graph was created by Trading Economics. They provide a a useful way to use the AIG Australian Manufacturing PMI figures to get reports in the format you want. If you explore it more deeply, you can see that we took a hit to Australian Manufacturing during the Global Financial Crisis (GFC) but it has been an upward trend from then on.

 

AIG

AIG

 

Go Australian Manufacturing!

 

Successful Endeavours specialise in Electronics Design and Embedded Software Development, focusing on products that are intended to be Made In Australia. Ray Keefe has developed market leading electronics products in Australia for more than 30 years. This post is Copyright © 2017 Successful Endeavours Pty Ltd.

Australian Manufacturing Increasing Trend

Australian Manufacturing PMI

The Australian Manufacturing PMI is a measure of the manufacturing economy in Australia. A score above 50 means it is growing and a score below 50 means it is shrinking. I recently reported in the post about out new location that we had been in growth for the past 17 months but according to one data source we missed out for a couple of months during that time. For the history see:

 

 

So I thought I would double check the data. I went to the Trading Economies Australian Manufacturing PMI and looked at the trend since 2012. Here is what I saw.

 

Australia Manufacturing PMI 2016

Australia Manufacturing PMI 2016

 

So my understanding of this graph is that after the Global Financial Crisis we saw Australian Manufacturing decline but since 2012 the decline has slowed and this past year it has grown.

 

As a result, I continue to be encouraged that Australian Manufacturing is Growing and we will continue to support that by developing modern electronics based products that are Made in Australia.

 

Successful Endeavours specialise in Electronics Design and Embedded Software Development, focusing on products that are intended to be Made In Australia. Ray Keefe has developed market leading electronics products in Australia for more than 30 years. This post is Copyright © 2016 Successful Endeavours Pty Ltd.