News Paper Analysis on Cost of Production


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.

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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 have supplied so the competition is so strong which is faced by the manufacturers of domestic area.

In Asia, china has 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 has 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.

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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.


  • 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.
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