Manufacturing Cost Analysis Report

This report analyzes an article focusing on the rising costs of production in Australia's manufacturing sector. The analysis highlights the correlation between production costs, commodity prices, and the Australian dollar's exchange rate. The report discusses the decline of the manufacturing sector's share in the Australian economy over the past 30 years, attributing this decline to increased competition from lower-cost economies, particularly in Asia. The Reserve Bank's business liaison program is mentioned as a tool to address the challenges faced by manufacturers. The report also examines the impact of factors such as labor productivity, the global financial crisis, and the demand for Australian-made goods in countries like China and India. Three graphs illustrating various comparisons within the manufacturing sector are referenced, showing trends in investment, output, and employment. The report concludes that a strong manufacturing sector is crucial for Australia's economic growth and that addressing production costs is vital for maintaining competitiveness.

NEWS
PAPER
ANALYSIS

TABLE OF CONTENTS
PART 1............................................................................................................................................3
PART 2............................................................................................................................................3
REFERENCES................................................................................................................................8

PART 1
The cost of production in manufacturing in Australia is highlighted in this article which
is done written by Sean Langcake. Basically Australia is a country where manufacturing
business is so broad in market. The article is all about the cost of production in manufacturing
and their correlation with the other sectors. In Australia the manufacturing is very important
business factor because their conditions are quite compatible for the manufacturing of such
goods. The cost of production in that time goes so high when the commodity price is rising. The
supply of such goods which are manufactured from the sources which consume more time and
low cost is done to the abroad(Vernon, 1966). The Australian dollar got appreciated as the
commodity price is rising in the Australian market. There are so many manufacturers who are
producing goods from past decade. The exchange rate which is depreciated recently improve the
competition between the producers of Australia and the output of manufactured products and the
investments of investors can be recovered from very limited resources or compact evidences.
The condition of the manufacturing business in Australia is getting down day by day due to the
higher production cost.
PART 2
The issue which is highlighted in this article is mainly based on the higher cost of
production and that is being more complicated to resolve because the Australian dollar price is
getting so high and the commodity price is also rising. Over the past 30 years the sector of
manufacturing in Australia is getting declined as a share of the total economy. The economy of
the Australia has very small share of that manufacturing business. The lower cost economies has
supplied so the competition is so strong which is faced by the manufacturers of domestic area.
In Asia, china have the higher demand of such commodities so the Australian dollar is
rising because the trade has also increased due to the strong demand from Asia. There is one
more factor that can make impact on the manufacturers that is exchange rate as if the exchange
got high then the competition and its pressure on the manufacturer will be automatically
increased. On the other hand this article has the focus on the Reserve Bank's business liaison
program. The program is to highlight the major challenges which are faced in the manufacturing
business and it tells about the responses of those manufacturers to those challenges.

As per the economic constraints of Australia the manufacturing business is increased so
smartly. The economy of Australia depends majorly on the manufacturing business and thus it
can give more productivity of the other sectors of businesses. In this article the profitability and
the Reserve Bank's program have linked according to the trade of Australia with the other
countries like China and India. Car manufacturing is the leading sector of business and the Asian
countries have major demand of such products which are manufactured in Australia. Basically
the economy of Australia have almost 7 % of share through the manufacturing business and the
cost of production in manufacturing should be reasonable for the growth in economy(MacDuffie,
1995).
In some cases the manufacturing sector is falling down from last 20 years in Australia.
As the labour productivity is increased so the whole economy has the impact of it. Basically
manufacturing is being after the production of such goods so it is essential that production
industry should have growth. Global financial crisis is the reason for the slow production in
global industry. After this the employment and growth in output roads to the failure in the sector
of manufacturing.

There are 3 graphs that indicate the various comparisons in manufacturing sectors in
which so many sub industries are being categorized. In graph one there are manufacturing
indicators which are to show the share of total economy and output of the employment and
relative investments. The investment in manufacturing business has got decreased over past 10
years as per the Graph 1.
Major investment is declined in machinery production and equipment and non-dwelling
construction. In Graph 2 the BS input-output shows the infrastructure of sub industry lies in the
manufacturing industry. Basically food products, beverages, tobacco and metal products, these
are some sub industries in which the manufacturing sector has been linked. In Graph 3 the
manufacturing output and employment survey has shown. The output is compared with economy
of Germany and employment is compared with japan(Grubel and Lloyd,1971).

If any country wants to make its economic growth with more steadily so they must have
the plans for their market. They have to maintain their manufacturing sector's share in their
economy and that can be give more flexibility in the economy and their shares in it. Basically I
personally believes that manufacturing sector has to be developed as broad they can because it
has maximum share in the economy of Australia. The international competition in manufacturing
sector depends on the economic growth of the economy other countries. The article says about
the various manufactured good trades and their due to this its impact on Australian dollar. The
cost in production in manufacturing will be implicated for the competitiveness in production
industry. The cost of production can be controlled by using proper strategies and it should be
reasonable for manufacturing of goods.

After evaluating and reviewing each and every aspect of this article which has
highlighted the cost of production in manufacturing in Australia, the manufacturing sector is
basically the backbone of the Australian economy and due to some unpredictable global crisis it
goes declined over past decades(Langcake, 2016). It is concluded after calculating the whole
scenario that people can apply to the employment in manufacturing sector as there are so much
of exposure for the skilled people who can provide more creativity to that sector. The Australian
dollar is depreciated in last few years which is being so helpful to their image in the sector of
Australian manufacturing. The vehicle production and transport equipment production will
make a positive difference in output.

REFERENCES
Books and Journals
Vernon, R., 1966. International investment and international trade in the product cycle. The
quarterly journal of economics. pp. 190-207.
MacDuffie, J.p. , 1995. Human resource bundles and manufacturing performance:
Organizational logic and flexible production systems in the world auto industry. ILR
Review. 48(2). pp. 197-221.
Grubel, H.G. and Lloyd, p. J., 1971. The Empirical Measurement of Intra‐Industry Trade.
Economic record. 47(4). pp. 494-517.
Online
Langcake, S., 2016. Conditions in the Manufacturing Sector.