Australia’s industry structure has undergone fundamental changes in recent decades, moving from an economy that was highly dependent on agricultural produce and manufactured goods, to today’s economy where service based industries are increasingly important for employment.
Three decades ago, Manufacturing was the largest employing industry in Australia, accounting for 15% of total employment. Employment in this industry, however, has fallen over the past 30 years, during which time most other industries have had rising employment. Today, Manufacturing is the sixth largest industry and accounts for 8% of total employment.
The decline in Manufacturing employment has been caused by many factors, including increased competition from overseas manufacturers who often have lower production costs.
People are also less likely to be employed in Agriculture, Forestry and Fishing than they were 30 years ago. In 1988, 6% of the workforce was employed in this industry, compared with 3% in 2018. This has been due to a combination of factors, including technology and automation. Nonetheless, this industry continues to employ more than 325,000 workers, particularly in regional areas.
The importance of the services sector to the economy has expanded rapidly in recent years, offsetting the falls in other industries. Today, more than three in every four Australian workers are employed in a service industry. Service industries can be considered to include all industries besides Manufacturing; Construction; Agriculture, Forestry and Fishing; Mining; and Electricity, Gas, Water and Waste Services, although, even within these industries, there are service components.
Much of the growth in the services sector has been driven by Health Care and Social Assistance. With Australia’s growing and ageing population requiring more care, and the roll-out of the National Disability Insurance Scheme, this is expected to continue.
Professional, Scientific and Technical Services has also recorded strong employment growth and has almost doubled its share of employment over the past 30 years (from 5% to 9%).
Sources: ABS, Labour Force (trend)