Sydney overtakes Melbourne as Australia’s biggest manufacturing centre


Victorian capital Melbourne has lost its long-held status as the nation’s biggest manufacturing centre to Sydney, reveals the SGS Economics and Planning report aimed at analysing the economies of Australia’s capitals.

Image credit: freedigitalphotos By: Pong
Image credit: freedigitalphotos By: Pong

According to the article on the Sydney Morning Herald, Sydney has registered a 2.1 % growth of the gross domestic product in the last financial year, topped only by Perth’s 3.2%.

Translated into numbers, it means that Sydney’s GDP amounted to $337.5 billion in 2012-13, compared to Melbourne’s $263.7 billion. Further, the report showed that the value of Sydney’s manufacturing industry has surpassed the $21 billion benchmark in 2012-13, with Melbourne’s manufacturing value set at $18.9 billion.

SGS analyst Terry Rawnsley locates the reasons for Victoria’s manufacturing woes into its large-scale, export-oriented capacities such as car makers, who have been experiencing great difficulties to tackle the problems presented by the high dollar and low-cost competitors.

Contrary to Victoria’s manufacturing sector, Sydney’s manufacturers have been focused on the domestic market and high-tech manufacturing such as biotechnology and advanced electronics, which have been less affected by the high dollar.

“There has been a big shock to low-value manufacturing and that has hit Melbourne pretty hard,” Mr Rawnsley said.

According to him, industry assistance may have made some of the Victorian businesses complacent.

“Maybe some of the Victorian manufacturers got a bit lazy because they know there were some government subsidies flowing around,” he said.

“Whereas the NSW guys made sure they were running a tight ship and made a profit.”

The report also revealed that Sydney’s workers had a higher output per hour than the other capitals, with financial services being the city’s biggest industry sector, accounting for nearly 16% of its output.