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Manufacturing cost-structure in Australian industries

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Holmes Institute Sydney

   

HI5003 Economics for Business (HI5003)

   

Added on  2020-03-13

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In the HI5003 Research Paper, we will discuss Australian Manufacturing Costs. The manufacturing process is the process of transforming various raw materials into finished goods. The Industry Manufactures many goods such as equipment, food, chemicals, tools, etc. In Australia, this industry's contribution to its National GDP has been high and increasing over the years.

Manufacturing cost-structure in Australian industries

   

Holmes Institute Sydney

   

HI5003 Economics for Business (HI5003)

   Added on 2020-03-13

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Running Head: Australian Manufacturing CostsManufacturing cost-structure in Australian IndustriesBy (Name)(Tutor)(University)(Date)
Manufacturing cost-structure in Australian industries_1
Australian Manufacturing Costs2Manufacturing cost-structure in Australian IndustriesIntroductionManufacturing is the process of transforming various raw material into finished goods (Britannica.com, 2017). The industry manufactures many goods such as equipment, food, chemicals, tools, etc. In Australia, this industries contribution to its national GDP has been high and increasing over the years. However, the contribution have been on a steady decline (Langcake, 2017). The industry is a major source of employment for the Australians and thus an important industry to this economy (Business.gov.au, 2017). Despite the fair performance, this industry has been faced by many challenges that undermine its production capacity. One of the important challenge is that of increased production costs. The manufacturing costs have risen to greater levels which makes it more expensive to produce in Australia. Accc.gov.au (2017) noted that costs of production are calculated by summing the labor costs, material costs and the overheads. Some of the companies in this industry have closed down owing to their inability to continue operation at the increased costs. Other companies are still running at a risk of closing down. This paper will highlight some of the firms that are nearly closing down as an impact of the risen manufacturing costs. Since the paper will also point out some of the factors that are responsible for the rising costs, the paper will offer assistance to the policy makers in making development decisions. The need for the government to intervene in lowering the manufacturing costs will rise after an analysis on some of the important benefits of this industry. AnalysisAbbas Valadkhani (2016) wrote an article “Collapse of Australian car manufacturing industry” which represented the impact of rising manufacturing costs. He noted that car manufacturers Ford, Mitsubishi, Toyota and Holden were projected to exit their operations in Australia by the end of 2017. This was a shift to overseas economies where the manufacturing costs are lower; this is a great loss to the Australian economy. The direct impact of this will be felt in the change in output and hundred thousands of job losses both in the upper stream and downstream industries. According to the Australian Bureau of Statistics (ABS), the percentage oftotal workforce employed in this sector is 8.5% which accounts for more than a million workers. There are many reasons that explains why the Australian motor industry are ceasing their operation in Australia. One is that it’s not possible for this economy to exploit full economies of scale owing to the small size of the Australian market. The Australian domestic market
Manufacturing cost-structure in Australian industries_2

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