February and March were dark months for Australian manufacturing and aviation workers. Unfortunately, they are not the only sectors tipped to feel the pain of restructuring. Sources: Business Spectator, The Age
In its predictions on the future growth and decline of jobs across Australia released last year the Department of Employment estimated that there would be thousands of job losses between now and 2017.
The government admits that its projections should be taken with an “inherent degree of uncertainty” as they do not account for “unanticipated economic shocks, major policy initiatives or natural disasters”.
The scale and frequency of layoffs did come as a shock in February but probably not a surprise for any close watchers of the airline, automotive and mining services industries.
The government clearly underestimated the speed with which the large carmakers would exit production in Australia.
In terms of the aviation sector, Virgin and other airlines have steadily hired more and more employees over the past couple of years, and the extra capacity poured into the sector would have encouraged the Department of Employment to revise numbers up.
Overall, the data presents some good news for the economy. If you ignore all of the sector subdivisions, then all but one of Australia’s industries are predicted to grow, with healthcare and retail trade leading the way.
The one exception to this is the agriculture, forestry and fishing sector, which is forecast to shed a staggering 13,000 jobs between now and 2017.
Australia’s forestry industry is in “structural decline” and is comparable in ways to the stricken car industry, according to economists.
Prime Minister Tony Abbott said he would like the forestry industry to be a ”vital” part of the economy, announcing the Forestry Industry Advisory Council to help the industry.
But economists say the industry is too small and beset by problems to be a vital part of the economy, despite years of subsidies.
“It has historically been an important industry for Tasmania, but it’s not especially important for Australia at all,” said Bank of America Merrill Lynch chief economist Saul Eslake.
“It would be true to say it’s in structural decline … even more so in Tasmania.”
The high exchange rate, changing consumer tastes, poor product image and global competition have contributed to its decline in recent decades, economists say.
And figures from the rural forecaster Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) show its employment has been declining in the sector.
In forestry and logging, as well as wood product manufacturing industries, employment fell last year from roughly 66,700 in 2011-12 to 64,000 in 2012-13.
Since the late 1980s, federal and state governments have been trying to support the industry and boost conservation with numerous assistance packages.
Last year, Tasmania’s forestry industry was promised another $300 million after the Tasmanian Forestry Agreement was finalised.
The Australia Institute in December reported that in the past three years more than $180 million has been spent on buyouts and structural adjustment assistance, equating to roughly $140,000-$280,000 per worker “removed” from the industry.
“It makes the car industry look like it is swimming along nicely,” said director Richard Dennis. “When thinking about the economic of it, every element is working against it.”
