The Hidden Employment Footprint of Australian Manufacturing

Australian manufacturing is sometimes spoken about as though it is now a relatively small part of the Australian economy.

If we only count the people directly employed inside businesses classified as manufacturers, that can appear to be true.

But manufacturing does not operate in isolation.

Manufacturers buy components and materials. They use freight and logistics services. They need engineers, industrial designers, software developers, accountants, certification specialists, maintenance contractors and equipment suppliers. They purchase energy, property, finance and professional services. Products then create further work through distribution, installation, commissioning, service and support.

So a more useful question is not simply:

How many Australians work directly in manufacturing?

It is:

How large is the employment footprint associated with Australian manufacturing?

When we look at the employment data through that lens, the picture is very different.

The National Picture: Australian manufacturing has an employment footprint equivalent to around 27% of Australian employment

Australia has approximately 870,000 people directly employed in manufacturing.[1]

Manufacturing also has a relatively high proportion of employment. Approximately 83% of manufacturing employed people are full time.[2]

Whereas with 9.4 million full-time employed people across the Australian economy and 14.8 million total employed people across the Australian economy [1]

9.4 ÷ 14.8 = 64% of employed people are full time in the Australian economy.

Around 83% of manufacturing employment is full time, compared with around 64% of employment across the Australian economy. Manufacturing therefore has a substantially higher proportion of full-time employment than the economy overall.

But the 870,000 direct manufacturing employed people are only the beginning of the employment footprint.

Manufacturing has substantial upstream and downstream supply chains. AMGC reports an average employment multiplier of 3.6 additional employed people for each person directly employed in manufacturing. Even though some High Technology Manufacturing can lead to a higher ratio, this average figure of 3.6:1 has been used throughout this analysis.[3]

Those indirect employed people include areas such as:

• component suppliers,
• freight and logistics,
• industrial maintenance,
• engineering,
• industrial design,
• compliance,
• technical services,
• industry associations,
• and other businesses for whom work exists because manufacturers also need them such as accountants, lawyers, Officeworks…

Using that AMGC average multiplier where 1 employed person in manufacturing leads to 1 + 3.6 = 4.6 total employed people:

870,000 x 4.6 = approximately 4 million total employed people.

Against the approximately 14.8 million total employed people in Australia:

4.0 ÷ 14.8 million = approximately 27%.

Which lead to:

Australian manufacturing has an employment footprint equivalent to around 27% of Australian employment.

That is a very different picture from looking only at the factory floor.

Manufacturing is not just one employment category sitting beside professional services, transport, engineering and other parts of the economy. It is one of the economic activities creating demand for many of those jobs.

This also means that losing manufacturing capability has consequences well beyond the people directly employed by manufacturers.

When a manufacturer closes, moves production offshore or no longer develops new products in Australia, some of the economic effect appears elsewhere: less freight, less engineering, less maintenance, less local component supply, less industrial design, less testing and certification, and less demand for the many professional and technical services surrounding production.

This is one reason I believe manufacturing policy needs to consider the whole industrial ecosystem, rather than simply counting direct manufacturing jobs.

This also does not mean that four million distinct jobs would disappear if Australian manufacturing disappeared. Industry employment multipliers describe the breadth of economic activity associated with an industry, and those footprints overlap with other sectors. The figure is therefore best understood as a measure of manufacturing’s integration with the wider economy, not as a counterfactual job-loss estimate.

The important point is not that manufacturing somehow “owns” 27% of Australian jobs. It is that direct manufacturing employment substantially understates how deeply manufacturing is woven into the wider economy.

Victoria: An Employment Footprint of Around 31%

The effect is even stronger in Victoria.

Victoria has historically represented roughly 30% of Australia’s manufacturing employment and remains Australia’s largest manufacturing state.[4]

There are 260,243 direct manufacturing employed people in Victoria.[4]

Again applying the 3.6 to 1 indirect ratio so there are a total of 4.6 employed people per manufacturing employed person:

260,243 × 4.6 = 1,197,118 total employed people.

Victoria has approximately 3,817,600 employed people.[6]

So:

1,197,118 ÷ 3,817,600 = 31.4%.

The conclusion is:

Victorian manufacturing has an employment footprint equivalent to around 31% of Victorian employment.

That makes manufacturing far more important to Victoria than the direct manufacturing employment number alone suggests.

It also helps explain why the health of manufacturing has such a large effect on Victoria’s wider economy.

Manufacturing creates work for logistics companies, engineers, technicians, software developers, maintenance businesses, laboratories, toolmakers, professional services firms and a very large range of other businesses.

And nowhere in Victoria is that relationship more concentrated than Melbourne’s South East.

Greater South East Melbourne: An Industrial Engine Room

Greater South East Melbourne, or GSEM, is Australia’s largest concentration of manufacturing capability.

75,046 direct manufacturing employed people are located within the GSEM region.[5]

Applying the same 4.6 total employed people per manufacturing job:

75,046  × 4.6 = approximately 345,212 total employed people supported by manufacturing.

Those other employed people are not all physically located in Greater South East Melbourne.

That is precisely the point.

Manufacturers in Dandenong, Monash, Kingston and the wider South East purchase services and products from businesses throughout Victoria and Australia. Their freight networks extend far beyond the region. Their professional advisers may be in central Melbourne. Their component suppliers can be elsewhere in Victoria or interstate. Raw materials can come from regional Australia.

So the economic footprint of GSEM manufacturing extends far beyond GSEM itself.

Compared with Victoria’s approximately 3,817,600 employed people:

345,212 ÷ 3,817,600 = 9.0%.

That means manufacturing capability physically concentrated in Greater South East Melbourne supports:

Manufacturing located in GSEM has an employment footprint equivalent to around 9% of Victorian employment.

That is an extraordinary economic concentration.

It is also why what happens to manufacturing in Melbourne’s South East is not merely a regional issue.

It is a Victorian issue and, because of the scale of the region, a national one.

Manufacturing Is an Ecosystem

None of this means every indirect job disappears immediately if one manufacturing job disappears.

Economic systems are not that simple.

What the figures show is something more important: manufacturing supports a much larger employment ecosystem than direct manufacturing statistics reveal.

And that matters when we discuss Australian productivity, sovereign capability, innovation, commercialisation and economic policy.

A factory is not just the people standing beside the production equipment.

Behind every successful manufactured product can sit:

• engineering and product development,
• suppliers,
• tooling,
• production equipment,
• testing,
• calibration,
• software,
• logistics,
• compliance,
• finance,
• sales,
• installation,
• service,
• maintenance,
• and support.

Those capabilities reinforce one another.

Lose enough manufacturers and eventually the surrounding capabilities become harder to sustain.

Lose the surrounding capabilities and manufacturing itself becomes harder to sustain.

This is why rebuilding Australian manufacturing cannot simply mean subsidising a factory or attracting a multinational assembly operation.

We need the wider capability system that allows Australian businesses to design, develop, manufacture, test, maintain and improve products here.

And we need enough commercial activity to keep those capabilities economically viable.

Australian Manufacturing Is Not Dead

Australian manufacturing has certainly changed.

We no longer make many of the mass-market consumer products we once made, and some highly visible industries have disappeared.

But that should not be confused with manufacturing no longer mattering.

The employment footprint suggests exactly the opposite.

At a national level, manufacturing supports an employment footprint of approximately 27% of Australian employment.

In Victoria it is approximately 31%.

And manufacturing located within Greater South East Melbourne alone supports an employment footprint equivalent to approximately 9% of all Victorian employment.

So when we discuss whether Australia needs a manufacturing strategy, this is not a discussion about protecting a small historical industry.

It is about the health of a substantial part of the Australian economy.

If we want productive, technically capable and economically resilient communities, then maintaining and growing the capability to make valuable things in Australia matters.

A lot.

Data Sources and Citations

[1] Direct Australian manufacturing employment and national employment — ABS / Jobs and Skills Australia. The cleanest page for the manufacturing figure is Jobs and Skills Australia’s industry profile, which reports 868,100 employed in manufacturing from ABS Labour Force Survey data for February 2026.
Jobs and Skills Australia — Manufacturing
For the underlying ABS detailed labour-force tables:
ABS — Labour Force, Australia, Detailed, February 2026

[2] Manufacturing full-time ratio. The same JSA page reports a 17% part-time share, which implies about 83% full time, rather than the 84% in our original document. The detailed ABS release also provides the underlying hours-by-industry tables.
ABS — Labour Force Detailed, February 2026

[3] Manufacturing employment multiplier — AMGC. I found a substantially better source than the wording in our original citation. AMGC explicitly states that Australian manufacturing provides 3.6 additional roles in complementary industries for every direct manufacturing role.
AMGC — Australian manufacturing wins as AMGC forecasts billion dollar return
AMGC repeats the 3.6 average and notes that some high-tech manufacturers can support much higher downstream employment.
AMGC — A message from Jens Goennemann

[4] Victorian direct manufacturing employment. The Victorian Government reports 260,243 manufacturing workers in 2024, which is an excellent direct source for the approximately 260,000 figure.
Victorian Government — What it’s like to work in manufacturing

[5] Greater South East Melbourne manufacturing concentration. The Deloitte/GSEM analysis says GSEM has 3,801 manufacturing businesses and 75,046 manufacturing jobs, and describes it as Australia’s largest manufacturing region and workforce.
Deloitte — Greater South East Melbourne: Australia’s manufacturing powerhouse
GSEM — About Greater South East Melbourne

[6] Victorian total/full-time employment. The ABS monthly Labour Force release provides Victorian employment and full-time employment series by state; July 2026 is now the latest release.
ABS — Labour Force, Australia, July 2026

Successful Endeavours specialise in Electronics Product Development and Embedded Software and IoT, focusing on products that are intended to be profitably Made In Australia. Ray Keefe has developed market leading electronics products in Australia for more than 40 years.

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