The end of manufacturing in Australia
Ross Gittins has a piece, drawing on research by Jeff Borland of the University of Melbourne, in which he presents a “glass half-full” view of the Australian manufacturing sector. He makes some good points, but the overall picture is misleading.
It’s true that, on standard statistical definitions of the manufacturing sector, there’s still a fair bit of employment and output, though both have declined in recent years and will almost certainly continue to do so, given the recent closure announcements. But what’s left of manufacturing looks very different from the mental image the word ‘manufacturing’ produces, at least for me: a large factory, with hundreds of manual workers producing complex industrial products (consumer goods, motor vehicles, industrial equipment and the like).
A closer look at Borland’s data reveals the following:
* Within manufacturing, the main growth area is food processing typified by the production of meat, bread, milk and wine. More traditionally manufacturing-oriented parts of the sector like canning fruit are in decline as we saw recently with the near-closure of SPC.
* As regards employment, the share of managerial and professional staff is expanding, while that of laborers and machinery operators, the kind of jobs we would typically think of as ‘factory work’, is falling. 
On the latter point, Borland shows that laborers and machinery operators now represent 30 per cent of a manufacturing workforce of 955 000, implying around 285 000 jobs in total, around 2.5 per cent of all employment. By contrast, in 2011, there were 290 000 schoolteachers in Australia.
To sum up, manufacturing in the traditional senses of the term, is no longer a significant part of the Australian economy. This has a number of implications.
First, for better or worse, the “protection vs free trade” debate is over, at least as regards trade in manufactured goods. There is, for practical purposes, no manufacturing sector left to protect, and no way of bringing back what has gone.
Second, the kind of Laborism that sees factory workers (typically caricatured as having reactionary social attitudes) as the archetypal base of the labour movement and the ALP, in contrast to middle-class parvenus like schoolteachers (caricatured as latte-sipping lefties), needs to be consigned to the dustbin of history.
Third, ideas about industry policy need to be brought up to date, with a focus on services rather than goods. This is likely to imply more scope for intervention rather than less, since the traditional arguments for free markets and free trade are often a lot less convincing in relation to services.
fn1. The share of technicians and skilled trades (within a falling total) has remained stable, but I suspect that within that group, there has been a shift towards technicians and away from manual trades.