There is little doubt that 2020 has seen reversals in manufacturing across the board, but it is the resilience of the sector that really needs to be reflected upon. One leading indicator is the Performance of Manufacturing Index, from the Australian Industry Group.
Start to 2020 Down
The manufacturing year in Australia started with three consecutive contractions, which added with the contraction in December 2019, saw a sharp decline in output overall. April bucked the trend, mostly due to the sharp increase in demand for food and groceries. But then the slide continued.
Covid-19 has had the single biggest impact on manufacturing output since the Global Financial Crisis in 2008. All sectors have seen contraction of some sort since the real effects of the national lockdown started in March.
Food & Beverage
Food and beverage has been the standout in arresting the decline amidst the pandemic, with demand originally softening but now coming on strong for consecutive months.
The Challenge Now
Individual states are going through different stages of lockdown, with varied results, all impacting on aggregate demand. The federal government has invested in maintaining employment levels as best it can with the JobKeeper subsidy, which is due to end in September. The future of manufacturing in Australia is closely linked with whatever assistance is available at national level.