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Australia 1975 to 2000-Part A: Industrial Change
Guy Woods
Statistics Group
6 June 2000
Introduction
Public policy in Australia underwent a major change during the last quarter
of the 20th century. From the Whitlam Government to the Howard
Government public policy has sought to modernise Australian society and
its economy.
This Research Note is the first in a series that examines how much Australia
has changed during this period. It looks at the industrial structure of
the economy; others to follow will examine labour force issues and social
change.
Industrial Change
A strong manufacturing base is what made the world's most developed countries
economically powerful for most of the 20th century. However,
in recent decades these economies have undergone a transition. Resources
in these economies have shifted from the secondary manufacturing industries
to the tertiary or services based industries.
Distribution of Labour
In terms of employment by industry major, changes have occurred in the
distribution of labour.
Mining, manufacturing, electricity, gas and water and communication services
all have reduced employment. Comparable statistics show that employment
in electricity, gas and water has shrunk by an average of 5.3% a year
since 1985.
In 1985 manufacturing used to account for 16.5 % of employment. This
has fallen to 12.1% in 1999. It has been replaced by the retail industry
as the nation's number one employer. The retail industry has grown from
13.7% to 15.3% of total employment with an average annual growth rate
of 2.7%.
The most dynamic industry, from the point of view of employment growth,
has been the property and business services industry. This has grown from
6.6% of the employed work force to 11.5%, achieved with an annual average
growth rate of 5.7% a year since 1985. Other industries that have performed
well are in the service sector of the economy. They are the education,
accommodation, cafes and restaurants, cultural and recreational services
and personal services industries.
Distribution of Gross Product
The biggest growth industry, in terms of its share of Gross Domestic
Product (GDP), has been the property and business services industry. Since
1975 this has grown from 7.1% of GDP, to 10.1% of GDP in 1999. It has
achieved this with an annual average growth rate of 4.8% a year. In relative
terms this industry is now almost as big as the manufacturing industry.
Over this period the importance of manufacturing to the economy has been
greatly reduced. In 1975 manufacturing accounted for 19% of GDP, it now
only accounts for 12%. Although it has grown over the period it has not
grown fast enough to maintain its once dominant role. Its annual average
growth rate of 1.5% makes it the slowest growing industry during this
period.
The fastest growing industry was the communications industry, which recorded
an annual average growth rate of 7.7% a year and raised its share of GDP
from 1.2% to 3.2% of GDP. Mining, like the communications sector, also
grew rapidly during this period and increased its share of GDP from 3.2%
to 4%.
In overall terms the statistics suggest that Australia's economy has
shifted to one more reliant on service industries for economic growth
and employment. Education, cultural services and health have all shown
gains in both measures.
Exports
The exporting sector of the economy has greatly changed during this period
too. In 1975 exports accounted for 15% of GDP. They are now equal to 19%
of GDP. There has also been a shift away from the traditional nature of
Australia's exports. More foreign currency is now earned by the services
sector of the economy. In 1975 services made up 19.6% of exports credits;
they now account for 22.4% of all credits.
In terms of merchandise trade Australia is no longer so reliant on the
produce of its primary sector. In 1978 primary products made up 77% of
all merchandise trade. They now account for 55%. Primary sector products
have declined in favour of manufactured exports. In 1978 Elaborately Transformed
Manufactures (ETMs), such as computer parts and motor vehicles, accounted
for 10.9% of all exports, this compares with 21.8% in 1999. Indeed the
data shows that now, in terms of Australia's exporting sector, the largest
single economic category is that of ETMs.
STM - simply transformed manufacture, ETM - elaborately transformed manufacture
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