Manufacturing not all bad news: report

AUSTRALIA'S manufacturing sector is not all doom and gloom despite the recent string of job losses, a report says.

The Manufacturing Workforce Study 2014 says the jobs decline was driven by a transition out of heavy industrial manufacturing and into hi-tech, and higher value-added, goods where Australia has shown it is globally competitive.

"Aggregate employment in this industry has been decreasing ... and at the same time Australia's prosperity has increased," said Sue Beitz, general manager of the Australian Workforce and Productivity Agency (AWPA) which prepared the report.

"We also know that it is not doom and gloom in every single (manufacturing) sector ... we do see that there are fabulous opportunities in the areas of pharmaceutical, biotechnology, food and beverage, either in moving to the higher end of production or entering new markets."

The report says Australia needs to increase the skill levels of the manufacturing workforce, noting almost half (45.2 per cent) of existing workers do not hold any post-school qualifications.

"Recently the high dollar has been touted as a real challenge ... The issue is really about how we continue to adapt our manufacturing industry from the capital intensive to knowledge intensive offering," Mrs Beitz said.

"And this challenge of getting clever people out of laboratories and into businesses."

The report found almost one million Australians (936,400) were employed in manufacturing and this has declined 10.2 per cent over the past decade (or around 106,600 jobs).

Under the "three most plausible scenarios" considered by the AWPA, manufacturing job were forecast to continue to decline 1.0 to 1.5 per cent per annum out to 2025.

The report's release comes amid speculation the Abbott government is preparing to abolish AWPA and merge its functions into the Department of Industry.

AWPA, established by Labor in 2012, includes representatives of Australian Chamber of Commerce and Industry (ACCI), the Australian Industry Group and unions.

"The Abbott government claims it wants input from industry, yet it is apparently seeking to disband the key national policy and research body on skills, which brings stakeholders together," opposition industry spokesman Kim Carr said.

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