Over the last century, Australia’s industry structure has gone through fundamental changes, moving from an economy that was highly dependent on agricultural produce and manufactured goods, to today’s economy where service-based industries are becoming increasingly important for employment.
A quarter of a century ago, Manufacturing was the largest employing industry in Australia. Today, it is the sixth largest and accounts for 7% of total employment. The decline of Manufacturing has been caused by many factors, including increased competition from overseas manufacturers, who often have significantly lower production costs.
People are also less likely to be employed in the Agriculture, Forestry and Fishing sector than they were 25 years ago. In 1990, 6% of the workforce was employed in this industry compared with 3% in 2015. This has been due to a combination of factors, including the effect of long droughts and labour saving technology. Nonetheless, this sector continues to employ hundreds of thousands of Australians, particularly in regional areas, and to create jobs in other industries including Manufacturing (there are expected to be new jobs created in Food Product Manufacturing) and Transport, Postal and Warehousing.
The importance of the services sector to the economy has expanded rapidly over recent years, offsetting the decline in Manufacturing and Agriculture, Forestry and Fishing. Today, almost four out of every five Australian workers are employed in a service industry. The broad grouping of the services sector can be considered to include all industries with the exception of Manufacturing; Construction; Agriculture, Forestry and Fishing; Mining; and Electricity, Gas, Water and Waste Services, although, even within these industries, there are clearly ‘service’ components.
Much of the growth in the services sector has been driven by Health Care and Social Assistance. This industry has shown strong and consistent growth in the past decade and with Australia’s ageing population requiring more care, this industry will continue to grow. The Professional, Scientific and Technical Services industry has also displayed strong employment growth, assisted by higher levels of business investment in technology, as well as the outsourcing of industry services, particularly those associated with Architectural, Legal and Accounting services.
Share of total employment, selected industries, 1990 and 2015 (%)
Sources: ABS, Labour Force (trend and annual averages of original data); ABS, Education and Work; Department of Employment, Industry Employment Projections