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Australian Manufacturing Grows

Last night I was at the SEMMA (South East Melbourne Manufacturers Alliance) end of year get together at the Nissan Casting Plant in Dandenong. We were celebrating another year of Australian Manufacturing, and in particular Melbourne Manufacturing. The Nissan Casting Plant is a great example of how we can compete globally. Nissan have pulled their car assembly operation out of Australia a long time ago but the casting plant stayed and supplies their world chain.

SEMMA

SEMMA

And I was reminded again that not only is Australian Manufacturing not dead yet, it is in fact still growing. Check out this 5 year view of the Australian Performance of Manufacturing Index. 50 represents stable with numbers below 50 meaning it is contracting and numbers above 50 meaning it is expanding or growing.  The trend line is up and it has been expanding since 2015 with only 1 month where that didn’t happen.

 

Australian Manufacturing PMI 2017

Australian Manufacturing PMI 2017

That is 3 years of solid growth. So some really good news for the end of 2017 and I expect it to continue into 2018.

Successful Endeavours specialise in Electronics Design and Embedded Software Development, focusing on products that are intended to be Made In AustraliaRay Keefe has developed market leading electronics products in Australia for more than 30 years. This post is Copyright © 2017 Successful Endeavours Pty Ltd.

Australian Manufacturing PMI

The PMI, or Purchasing Manager’s Index, is a measure of whether a sector is growing or contracting. Growth is above 50 and contraction is below 50. So here is the last 12 months for Australian Manufacturing shown visually.

Australia Manufacturing PMI 2016-2017

Australia Manufacturing PMI 2016-2017

This is a continuing trend since mid 2015 and a really good thing for the overall Australian economy.

And to top it off, the growth in Australian Manufacturing in August 2017 was the highest since 2002. So really kicking some goals this year.

You can read more about it in:

Successful Endeavours specialise in Electronics Design and Embedded Software Development, focusing on products that are intended to be Made In AustraliaRay Keefe has developed market leading electronics products in Australia for more than 30 years. This post is Copyright © 2017 Successful Endeavours Pty Ltd.

Australian Manufacturing Boom

I’m really pleased to announce that the growth in Australian Manufacturing last year was the biggest since the GFC. Australian Manufacturing Exports now exceed 2009 levels and it was the 2nd largest jobs growth sector in the entire Australian economy.

You can probably tell I’m pretty excited about that.

Here are the statistics:

  • 40,000 new Australian Manufacturing Jobs in the past year
  • $100B in Australian Manufacturing Exports in the past year
  • $8B in raw Australian Manufacturing profits in the past quarter

And as covered in I Nearly Retired, Australian Manufacturing it has been expanding nearly every month for the past 22 months. I’m looking forward to August when it will be 2 straight years.

Australia Manufacturing PMI 2015-2017 shows growth the whole way

Australia Manufacturing PMI 2015-2017 shows growth the whole way

Manufacturer’s Monthly also covered this in Australian manufacturing industry rebounding.

Successful Endeavours specialise in Electronics Design and Embedded Software Development, focusing on products that are intended to be Made In Australia. Ray Keefe has developed market leading electronics products in Australia for more than 30 years. This post is Copyright © 2017 Successful Endeavours Pty Ltd.

Manufacturing Profits you can retire on

I was talking with one of our past clients a little while ago. They told me they had a problem. They said, “Ray, I nearly retired“! So I asked them what that meant. And they explained.

We had developed a product for them a decade ago. The total project cost then around $50,000 as it included both the product Electronics Design, Embedded Software and also the Automated Test Equipment (ATE) for Production Test which also had an Electronics Design, Embedded Software and Windows PC ATE Software component to it. And from that product they made nearly $2,000,000 in retained profit. From their perspective, nearly enough to retire on. And since they own the company it is theirs to distribute as they please. Now they wanted to do it again. So we are onto another very exciting Product Development for them. Can’t say any more about that yet.

So I though about the value proposition here. The maths says:

2,000,000 / 50,000 = 40:1 Return On Investment (ROI).

And that ignores the total value of the economic activity and profits their suppliers and customers have made.

Return On Investment (ROI)

Return On Investment (ROI)

Manufacturing Spearheads Economic Growth

The Victorian Government estimates that every $1 spent with a business like Successful Endeavours, there is $100 of overall economic value generated for the state. Makes you wonder why they don’t invest themselves? They used to through things like the Technology Voucher Program but all of that is currently shut down.

And of course there are the jobs this generates. Again, Victorian Government estimates are that every job in manufacturing creates another 5 jobs around it in the supply chain and supporting businesses. That is the highest ratio of any industry.

So what’s not to love about Australian Manufacturing! Let’s look at the benefits:

  • creates fundamental value (so the service sector has something to leverage off)
  • creates jobs and then more indirect jobs than any other industry so it is great for employment
  • creates profits

And far from being in decline, the Australian Manufacturing PMI has been in growth most of the past  2 years so that is also really positive for the overall economy. Check out he graph below from the Australian Industry Group (AIG).

Australia Manufacturing PMI 2015-2017 shows growth the whole way

Australia Manufacturing PMI 2015-2017 shows growth the whole way

The above graph was created by Trading Economics. They provide a a useful way to use the AIG Australian Manufacturing PMI figures to get reports in the format you want. If you explore it more deeply, you can see that we took a hit to Australian Manufacturing during the Global Financial Crisis (GFC) but it has been an upward trend from then on.

AIG

AIG

Go Australian Manufacturing!

Successful Endeavours specialise in Electronics Design and Embedded Software Development, focusing on products that are intended to be Made In Australia. Ray Keefe has developed market leading electronics products in Australia for more than 30 years. This post is Copyright © 2017 Successful Endeavours Pty Ltd.

Australian Manufacturing Grows

This month we have the interesting statistic that Australian Manufacturing has grown every single month for the past 12 months. That is a whole year of positive growth. Australian Manufacturing Expansion is a good in my opinion. I know we have been led to believe that Australian Manufacturing is gone with the exit of the car assemblers being the final straw, but the truth is very different. The Automotive Sector only accounts for 5% of Australia’s Manufacturing.

Innovation, technology and business expert

Professor Goran Roos

In my post on Modern Economies Need Manufacturing I cited some of the work by Professor Goran Roos who has both academic and business experience in making Innovation, Technology and Business work together. Hi Scandinavian background also means he is familiar with the benefits of collaboration and partnering for commercialisation, something we desperately need to do better here.

So Manufacturing Growth is a very good thing. It creates more jobs around it than an other industry and creates that fundamental value the service industry need to lever off. Let’s face it, someone has to do it.

Australian Exports Expand

And in addition, Australia has 300 More Exporters. That right, more companies are exporting now that a year ago. The lower Australian Dollar is responsible for some of this, and the better rhetoric at the Federal politics level has certainly helped.

AIG

AIG

Here is the Australian Industry Group report on Leading Performance Indicators: AiG-PMI-2016.

The average Australian Manufacturing PMI performance over the past 12 months is 52.3 where 50 = staying the same and more than 50 = growing. So measurably growing. You can get a more detailed report on just Australia is doing from Trading Economics Australian Manufacturing PMI.

Australian Manufacturing PMI June 2016

Australian Manufacturing PMI June 2016

So another good month for Australian Manufacturing. And a good thing that is.

Successful Endeavours specialise in Electronics Design and Embedded Software Development, focusing on products that are intended to be Made In Australia. Ray Keefe has developed market leading electronics products in Australia for more than 30 years. This post is Copyright © 2016 Successful Endeavours Pty Ltd.

CEDA Manufacturing Symposium 2016

The Casey Cardinia Region was a major sponsor of this particular symposium, also know as the Manufacturing and Future Industries Forum,  and so this meeting included some region specific statistics. So here they are:

  • Casey Cardinia Region is headed for 650,000 people over the next 20 years
  • Manufacturing accounts for more than 50% of GDP in Melbourne’s south East
  • 100 families a week move into the Casey Cardinia Region
  • 135 babies a week a born – hence Monash health referring to it as nappy valley 🙂
  • 70% of resident workers have to travel outside the region for work
Casey Cardinia Region

Casey Cardinia Region

Australian Manufacturing History

Committee for Economic Development of Australia

Committee for Economic Development of Australia

Manufacturing GDP in Australia has halved since then 1980s. This is offset by the rise in finance, mining and health. Looking at recent history it grew slightly from 2000 to 2008 then slowly dropped back to the same level today and for the past 10 months has grown each month.

Manufacturings declining percentage of GDP is due to holding its output level while GDP grows.

Employment has been the biggest reduction at 18% decline or 200,000 jobs; mostly in Victoria and South Australia.

Food and beverage is the biggest category followed by machinery and equipment which includes automotive. Construction and building materials has held its own in the light of recent Senate enquiries into sub-standard and non-conforming product being imported. This has led to an advantage in quality confidence for local products showing it isn’t just about price. This has also been assisted by the rise in residential construction on the eastern and South eastern sea board.

Major issues and roadblocks

The listed issues for Australian manufacturers are:

  • Access to finance
  • Australia is a difficult place to do business
  • Tax and regulation
  • Australia ranks 21st for global manufacturing competitiveness
  • Similar to other business rankings for Australia
Julie Toth

Julie Toth AIG

Industry Policy

The Victorian Government has identified 5 sectors for policy support:

  • Food and agribusiness
  • Mining
  • Oil, Gas and Energy
  • Advanced manufacturing
  • Medical and diagnostic devices

Discussion on Australia’s Future industries and employment options

The panel consisted of:

  • Dr Cathy Foley, CSIRO, Clunies Ross award recipient 2015 (Australia’s Nobel prize)
  • Michael Green, Victorian DEDJTR
  • Julie Tooth, chief economist AIG
  • Jennifer Conley, moderator
Dr Cathy Foley

Dr Cathy Foley – CSIRO

Michael Green made the point that Advanced Manufacturing meant the value add must go beyond the quality and cost story to the customer. So not getting the attention of the chief purchasing office, but instead of the new product or strategic technology alliance executive.

Dr Cathy Foley explained that we underestimate the value of thinking globally. CSIRO has a national remit but recognises it needs to help businesses achieve international competitiveness. And now they can help sole traders get to a breakthrough technology and not just focus on big players. In one project Cathy used their superconducting technology to create a new magnetic field detector to improve exploration efficiency.

CSIRO

CSIRO

Julie Tooth was asked if we had squandered our energy advantage? She explained that we used to have a cost advantage but that has now gone. Renewable investment has also been unreliable due to frequent changes in policy at both federal and state levels. Other policy and trade agreement activity has also muddied rather than clarified future direction.

AIG

AIG – Australian Industry Group

Dr Cathy Foley explained that the exit of girls from STEM needs to be seriously addressed. And where there is take-up, what we aren’t seeing is progressing into leadership and management roles. With our growing Asian background and proximity to Asia not being taken advantage of. We need to be wary of creating a social divide between higher socio-economic areas where you get access to coding and technology skills and those living in lower income areas or rural and remote communities do not.

Can we make high technology devices here?

Michael Green stated that this needs investment in the infrastructure.

Dr Cathy Foley noted that researchers stop short of delivering a full solution – traditionally this has been the case but it is increasingly becoming obvious that that path from fundamental research to applied research to full manufacturing capability including process technology improvement.

Michael Green explained that new manufactured products will have digital products and artefacts alongside it.

Improving collaboration?

It isn’t just a case of university to business collaboration. A business needs to collaborate with a broad range of other businesses including their own customers. So it isn’t a simple issue. A supply chain needs multiple entities and it isn’t just a case of dealing directly with the end customer but also supporting all the intermediates so the whole ecosystem end to end.

The CSIRO lean start-up program is focusing researchers on creating product product opportunities and engaging with potential customers and making sure they really need it.

And although I can’t yet give you details yet, we are involved in the development of one of the lean start-up products.

Grow Magazine

The most recent edition of Grow Magazine, an initiative between the Start News Group and the City of Casey, covered the event as well. You can read about it in Successful Endeavours – Grow Magazine 20160705.

GROW Magazine

GROW Magazine

You can also read the entire magazine online at Rising to the Global Challenge.

CEDA - Rising To The Global Challenge

CEDA – Rising To The Global Challenge

Successful Endeavours specialise in Electronics Design and Embedded Software Development. Ray Keefe has developed market leading electronics products in Australia for more than 30 years. This post is Copyright © 2016 Successful Endeavours Pty Ltd

Australian Manufacturing PMI

It is official. For the past 3 months Australian Manufacturing has grown each month. This has been confirmed by both AMTIL and Manufacturers’ Monthly.

This is in spite of weak demand in the metals sector. It is good to see some resilience showing as the manufacturing sectors diversify.

Australian PMI for September 2015

Australian PMI

The primary data comes from the Australian Industry Group Australian Performance of Manufacturing Index (Australian PMI). This is a numerical measure of manufacturing output and numbers above 50 indicate growth and numbers below 50 indicate decline. The primary reference link is Australian Economic Indicators.

So some good news for us all.

Successful Endeavours specialise in Electronics Design and Embedded Software Development. Ray Keefe has developed market leading electronics products in Australia for nearly 30 years. This post is Copyright © 2015 Successful Endeavours Pty Ltd.

National Manufacturing Week

Each year during National Manufacturing Week we have the opportunity to celebrate and explore Australian Manufacturing. It alternates between Sydney and Melbourne and in 2014 it is being held in Sydney from May 13-16 at the Sydney Showground, Sydney Olympic Park.

National Manufacturing Week

National Manufacturing Week

From the messages in the press recently, you would think that manufacturing in Australia is dead. But the truth is a long way from that. Recent announcements from the Automotive Manufacturing sector are disappointing but that is not the only manufacturing we do here. Manufacturing is the equal third largest sector of the Australian economy and the largest sector in Victoria. The sector it is equal in size to is mining. That’s right, the same size as mining!

So it is worth looking after a little better than we have been.

It kicks off on the 13th May 2014 with the exhibition followed by a networking function and the Endeavour Awards gala dinner. This year we entered the awards so are hoping to have some news about that soon.

The National Manufacturing Week networking event this year is being sponsored by the Casey Cardinia Region which is where Successful Endeavours is located. This is a very progressive venture between the City of Casey and the Shire of Cardinia. and a great example of the collaboration we need to become a lot better at in Australia. We are also a member of the Casey Cardinia Business Group which is one of their strategic initiatives.

Casey Cardinia Region

Casey Cardinia Region

 

Casey Cardinia Business Group

Casey Cardinia Business Group

We will be going to National Manufacturing Week this year and hope you will consider it too. If you haven’t been before, you might be pleasantly surprised at both the breadth and depth of Australian Manufacturing.

Successful Endeavours specialise in Electronics Design and Embedded Software Development. Ray Keefe has developed market leading electronics products in Australia for nearly 30 years. This post is Copyright © 2014 Successful Endeavours Pty Ltd.

Electronics News Future Awards 2012

Each year in Australia Electronics News give out 7 awards for Electronics Design.  We are very excited to announce that we received 2 of these 7 awards at the Electronics News Future Awards 2012. We are still waiting on official pictures from the awards ceremony held at the Australian Technology Park during the Electronex Exhibition.

The categories we won were:

  • Environment
  • Communications and Networking

 

Electronics Design

Electronics News Future Awards 2012

Environment

For the Environment category the award was for the control, sensing and tracking electronics systems on a combined solar PV and hot water system. The core technology from the client was the concentrated solar PV system which converts sunlight to electricity at a much higher efficiency that normal solar panels. Because it tracks the sun during the day it also delivers more power over the course of the day than a fixed installation can. And because it is concentrated sunlight there is a lot of heat. This heat is used to generate hot water via a heat exchanger system. Its a double win for the environment.

The core Electronics Design and Embedded Software we developed covered the following requirements:

  • Electrical Power Generation monitoring
  • Wireless Telemetry to an In Home Display
  • Heat differential measurements across the heat exchanger to 0.1C
  • Sun position sensing to within 0.1 degrees
  • Gravitic inclination sensing to within 0.1 degrees
  • Solar almanac to allow best effort tracking on overcast days
  • Solar tracking via a Brushless DC motor controller (BLDC)
  • Pump control for the heat exchanger
  • Logging of power and heat energy generation 
Environment Concentrated Tracking PV Solar + Hot Water

Concentrated Tracking PV + Hot Water

Communications and Networking

This was for converting wired timing gates for athletics to a wireless format using low power RF communications to allow the gates to communicate back to a central hub. This project had a lot of technical challenges. The core Electronics Design challenges were:

  • Use of IR through beam detection in full sunlight and without cross talk
  • Timing accuracy to 10msecs
  • Up to 4 sets of gates in operation in range of each other at the same time
  • Long battery life, or low power
  • Maintaining future expansion possibilities

 This follows on from our wins in 2009 for the Analogue Design and Design Software and in 2011 for Industrial Electronics.

The awards ceremony was followed by a round table discussion on Australian Manufacturing which I will cover separately.

Successful Endeavours specialise in Electronics Design and Embedded Software Development. Ray Keefe has developed market leading electronics products in Australia for nearly 30 years. This post is Copyright © 2012 Successful Endeavours Pty Ltd

Australian Manufacturing Jobs

In some recent conversations it became clear to me that most people I talk to in Australia don’t understand both how large the Australian Manufacturing sector is or how critical manufacturing is to Australian Employment and Australian Financial Prosperity.

In Modern Economies Need Manufacturing I cited research by Professor Goran Roos showing the relationship between economic growth, competitiveness, employment and industry sectors. Here is the condensed version covering just the impact of manufacturing on employment.

  • There are approximately 1,000,000 direct jobs in Australian Manufacturing
  • There are another 2,500,000 indirect jobs needed to support those 1,000,000 Australian Manufacturing Jobs
  • So there are 3,500,000 jobs in Australia either directly or indirectly dependent on local Australian Manufacture
  • These jobs support another 3,500,000 Australians
  • So there are 7,000,000 Australians dependent on Australian Manufacturing for their financial support

So there is the first figure. Roughly 1 in 3 Australians are dependent on local Australian Manufacturing for their financial support.

As an engineer, the exact figures tend to be better when you can get them. Fortunately the Australian Bureau of Statistics keeps records of all the required data so here is the more accurate version.

The were 11,421,300 jobs in Australia in December 2011 of which 953,500 were in manufacturing so therefore:

(1 + 2.5) x 953,500 / 11,421,300 = 29.2% of all Australian full time jobs are dependent on Australian Manufacturing. This is figure 2.

With 22,620,600 as the official population we have:

2 x (1 + 2.5) x 953,500 / 22,620,600 = 29.5% of the population is dependent on Australian Manufacturing for their financial support. This is figure 3.

So this shows just how much we are dependent on a strong and healthy local Australian Manufacturing Industry. Figures 2 and 3 show that both our financial future and employment are critically dependent on manufacturing.

Australian Emploment Breakdown by Sector

Australian Emploment Breakdown by Sector

The above graph is created from figures taken from the November 2011 ABS figures for employment.

In Australia, the only 3 sectors that  create more direct employment than manufacturing are Construction, Retail and Health Care. Mining comes in at 242,400and only 4 of the 19 sectors tracked by the ABS provide less employment than mining.

Victorian Manufacturing

In Victoria where I live, manufacturing is:

  • the largest economic sector
  • the largest employment sector
  • the largest export sector

So there is the 4th figure. Manufacturing is the primary source of wealth creation in Victoria.

City Of Casey

City Of Casey

Even in the City of Casey on the edge of Gippsland, Manufacturing is still the largest economic sector. Nationally it is equal third largest tied with mining. Manufacturing is not the small and insignificant industry that the media portrays it as nor governments state and federal treat it as.

I am not a disinterested party in this either, and neither should any Australian be disinterested in this. Australia needs a vibrant local manufacturing sector for our economic prosperity to continue.

Yes we do need to be smart, and we do have to focus on specific sectors, but we must ensure the economic environment is right to encourage the expansion of local manufacture. Here is the short list we are working on supporting right now in our current project mix:

  • clean energy generation
  • energy efficiency
  • electricity grid control automation and power factor correction
  • transport
  • water conservation and recycling
  • biomedical
  • nanotechnology
  • industrial controls
  • scientific instrumentation
  • waste reduction and recycling

So this is my pick of where we should focus our efforts based on today’s technology.

And for those who want to rely on the Knowledge Economy, Professor Goran Roos has pointed out that it depends on manufacturing since that is what drives most innovation.

Successful Endeavours specialise in Electronics Design and Embedded Software Development. Ray Keefe has developed market leading electronics products in Australia for nearly 30 years.  This post is Copyright © 2011  Successful Endeavours Pty Ltd

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