1. © Workforce Planning Australia - www.workforceplanning.com.au The Hume Workforce Development Committee Hume Regional Development Australia Manufacturing Labour Market Snapshot Workforce Planning Australia | March 2012

2. Manufacturing Industry 2 | The Manufacturing industry includes 6 key sectors: Source: Manufacturing Skills Australia, Environmental Scan 2012 Manufacturing Aerospace Process Manufacturing Furnishing Textiles, Clothing and footwear Metal, Engineering and boating Laboratory operations

3. National Industry Overview

4. Industry Overview Australia’s Manufacturing industry plays an important role in the Australia economy. The industry is the countries: ― Largest contributor to Gross Domestic Product (GDP). ― Third largest exporter ― Fourth largest employing industry (1 million people) Industry employment has fallen by 5.7% in the past 12 months (53,800 positions) and is forecast to reduce further over the next 5 years by 3.1% (30,400 positions). Factors impacting employment in the Manufacturing industry include: ― high value of Australian dollar ― overseas competition ― economic turmoil ― high levels of regulation ― uncertainty about carbon tax The industry is experiencing skills shortages mostly in technical and trade areas. Manufacturing is in a state of transition as products, markets, jobs and enterprises strive to become sustainable for the long term. 35% of employees are based outside of state capital cities. 4 | Source: Manufacturing Skills Australia, Environmental Scan 2012

5. Industry Employment The Manufacturing industry is the 4 th largest industry in Australia employing 945,600 people (8.3 % of the total workforce) across 250,000 enterprises. 5 | Source: ABS Labour Force Survey, February 2012 data. DEEWR, Australian Jobs, 2011 Industry Employment Level February 2012

6. Historical Employment Growth Manufacturing Over the last decade, employment in the Manufacturing industry has decreased by 86,000 (down 8.3%) Australia wide. Employment has fallen by 100,500 over the last three years. 6 | Source: ABS Labour Force Survey cat. no. 6291.0.55.003 (DEEWR trend data) DEEWR, Australian Jobs, 2011 Figure: Employment Level (‘000)- 2001-2011

7. Sectoral Employment in Manufacturing Employment by sector has changed considerably in the five years to August 2011. Food Product Manufacturing is the largest sector accounting for 21.1% of all jobs. Employment has declined in 10 of the 15 sectors over the five years with the largest decline in Fabricated Metal Product Manufacturing (down 31.8%). 7 | Figure: Sectors- Employment Growth (‘000) five years to 2011 Source: ABS Labour Force Survey cat. no. 6291.0.55.003 (DEEWR trend data) DEEWR, Australian Jobs, 2011

8. Main Employing Occupations The largest employing occupation in 2010 was Structural Steel and Welding Trades Workers, followed by Production Managers and Metal Fitters and Machinists. 8 | Source: ABS Labour Force Survey cat. no. 6291.0.55.003 (DEEWR trend data); DEEWR projections to 2014-15 Figure: Main Employing Occupations

9. Manufacturing Employment Prospects Manufacturing is the only industry in which employment is expected to decline (0.6% annually equating to 30,400 jobs), reflecting sustained overseas competition and more recent strengthening in the Australian dollar. 9 | Source: ABS Labour Force Survey cat. no. 6291.0.55.003 (DEEWR trend data); DEEWR projections to 2014-15 Sectors- Projected Employment Growth (‘000) – five years to 2015-16

10. Full-time/Part-time and Gender 86.1% of people employed in Manufacturing work full-time. Higher than all other industries. Female workers are also underrepresented making up just 26.1% of workers. 10 | Figure: Employment by Gender & Full-time/ Part-time (% share) - 2011 Source: ABS Labour Force Survey cat. no. 6291.0.55.003 (DEEWR trend data) DEEWR, Australian Jobs, 2011

11. Drivers of Workforce Change 11 | Manufacturing Trading termsRegulation Competition for skills International Context Working through Transition TechnologySustainability Source: Manufacturing Skills Australia Environmental Scan 2012 There are several drivers of workforce change affecting Manufacturing.

12. Drivers of Workforce Change Trading terms ― The high Australian dollar, low market demand, high cost of raw materials and global financial turmoil make turning a profit a challenge. ― Minimal fat to take losses. ― Competing countries do not have the same regulatory environment, have lower standards of employment and lower quality products. Regulation ― Keeping up with Regulation is an ongoing concern for manufacturing enterprises. “The compliance burden associated with business regulation is rising not falling” CEO National Survey on Business Regulation 2011. ― Enterprises find regulation too complex and inflexible. Current requirements act as a constraint on productivity. ― Uncertainty around environmental regulation and carbon pricing. Competition for skills ― Skills shortages remain high following the impact of the GFC, despite an expected decline in employment. ― Workers are being drawn away by higher-paid jobs in resources with aggressive recruitment campaigns run Australia wide. ― High skills and labour shortages is leading to a broadening of recruitment focus to include a more diverse group (e.g. women, indigenous, people with disabilities and skilled migrants) 12 | Source: Manufacturing Skills Australia, Environmental Scan 2012

13. Drivers of Workforce Change International Context ― Enterprises are impacted by global trade conditions, emerging economies and disasters globally (impact supply). ― Asian alliances are important to Australian manufacturing. Enterprises globally are watching developing markets in Brazil, Russia, India and Africa. ― As cost in China rise it is moving low-value work offshore. ― US manufacturing has been gutted with majority of manufacturing moved offshore and shedding of 2 million jobs. But a rebound is occurring in the US with some manufacturing returning. ― UK manufacturing is still being impacted by economic turmoil. Working through Transition ― Economic conditions are driving industry restructuring that is forcing enterprises to re-direct and re- organise their operations. Options include: o Improve efficiencies and make adjustments (right skills) o Moving production overseas, restructuring or refocusing product lines (retrench or retrain) o Demise (early intervention) ― Investment in innovation is required to pursue transition options and discover ways to increase value- add activity and get more from the resources boom. 13 | Source: Manufacturing Skills Australia, Environmental Scan 2012

14. Drivers of Workforce Change New and Emerging Technology (demand) ― Manufacturing will be hugely impacted by changes in technology (nanotechnology & biotechnology ) and increasing levels of use. ― Support for on-the-job training as a methodology to improve skills. ― There is a growing need to raise the information technology and communication (ICT) literacy and problem-solving skills. 75% of manufacturing workers did not have adequate problem solving skills. (Australian Literacy and Life Skills Survey.) Sustainability ― Transition to a sustainable future and cleaner, greener products and processes is making progress. ― Changes to work practices and implementation of new technologies. ― Lean manufacturing practices to reduce waste. ― New training packages to skill the workforce in sustainability improvements. ― Introduction of carbon pricing. ― Need for innovation. 14 | Source: Manufacturing Skills Australia, Environmental Scan 2012

15. Victoria

16. Industry Overview (Victoria) Manufacturing is the state’s third largest employer with 10.8% of total employment. There are approximately 16,500 enterprises which employ around 159,000 people. While the Victorian training budget has increased it has been directed to other sectors including recreation and fitness (+440%), business and clerical (+94%), tourism (+66%) and wholesale and retail (+62%). Manufacturing skills are essential to meet the needs of industry and address Victoria’s growing skill shortages 16 | Source: Manufacturing Skills Australia, Environmental Scan 2012

17. Skills Shortages in Manufacturing in Victoria 2012 Australian Government Skills Shortages in Manufacturing in Victoria in 2012 ― Automotive Electrician ― Motor Mechanic(General) ― Diesel Motor Mechanic ― Sheetmetal Trades Worker ― Metal Fabricator ― Welder (First Class) ― Fitters ― Meal Machinist (First Class) ― Panelbeater ― Vehicle Painter 17 | Source: DEEWR Skills Shortage List, Victoria, Dec 2011

18. Hume region

19. What’s happening in Hume in Manufacturing? 19 | While manufacturing is declining across Australia and Victoria some sectors within the industry have recorded employment gains. The largest growth has been in the Food Product Manufacturing sector It remains Australia’s fourth-largest employing industry. Manufacturing is a significant economic contributor to the region especially around Wodonga and Wangaratta, with manufacturing accounting for a larger proportion of employment in Hume than Melbourne. The most employment growth in the last decade has been in manufacturing and construction. Manufacturing is a key employer in Lower Hume particularly for residents living in the southern part along the Hume Freeway and who commute to the northern suburbs of Melbourne. There are employment vacancies in areas of Central Hume that are proving difficult to fill particularly for skilled manufacturing workers. Major food processing companies are located in the Goulburn Valley including SPA Ardmona, Campbell’s Soups and Unilever. The Goulburn Valley currently produces 90% of the Hume Region’s agricultural based manufacturing production. Source: Hume Strategy for Sustainable Communities 2010-2012, Skills Vic 2010

20. Employment in Manufacturing by LGA Towong 143 (2006) Wodonga 3,594 (2006) Alpine 678 (2006) Mansfield 162 (2006) Hume Region Boundary Sub-region Boundary Local Government Area (LGA) Boundary Indigo 1,344 (2006) Murrindindi 385 (2006) Mitchell 916 (2006) Strathbogie 523 (2006) G Shepparton Moira 1,870 (2006) Wangaratta 1,994 (2006) Benalla 1,071 (2006) 4,160 (2006) xxx (2011) TBC (2011) xxx 2011 TBC (2011) xxx 2011 TBC (2011) 2006 Census vs. 2011 Census data Total Industry 16,841 (2006) 14.3% TBC (2011) 20 |

21. Employment growth projections in Hume According to Monash projections employment is expected to decline over the period to 2016. 21 | Source: Monash Centre of Policy Studies, 2011 Usage is restricted to the Department of Education and Early Childhood development & third parties undertaking work on behalf of Skills Victoria

22. Occupation growth Monash Projections show some growth in product assemblers, ICT managers, Telecom Engineering Professionals and Metal Casting Tradespersons 22 | Source: Monash Centre of Policy Studies, 2011 Usage is restricted to the Department of Education and Early Childhood development & third parties undertaking work on behalf of Skills Victoria

23. Industry Education attainment levels 23 | VET education enrolment data shows an increase in course enrolments for the industry. Growth is being driven by the Cert IV, III, II, I level qualifications Source: Data prepared 9 March 2012, Market Analysis team, Skills Victoria.

24. Age profile of enrolments Across all occupations the majority of VET enrolments are in the 15-19 and 20-24 age groups. There has been the greatest growth in VET course enrolments from the 50-54 and 55-59 age groups. 24 | Source: Data prepared 9 March 2012, Market Analysis team, Skills Victoria.

25. Diversity of Enrolments There has been an increase in the diversity of enrolments across the industry in Hume. The greatest increase has been in the proportion of CALD students. 25 | Source: Data prepared 9 March 2012, Market Analysis team, Skills Victoria.

26. Food & Drink Factory Worker

27. Food & Drink Factory Worker VET Course Enrolments 27 | Source: Data prepared 9 March 2012, Market Analysis team, Skills Victoria. Enrolments of Food and Drink Factory Workers in Cert I and II in Food Processing has increased from 2008-2011. The Cert III enrolments indicates that this may be a new course or newly required for this group.

28. Food and Drink Factory Worker Age Profile of VET Enrolments 28 | Source: Data prepared 9 March 2012, Market Analysis team, Skills Victoria. The age profile of VET enrolments by Food and Drink Factory Workers indicates an increase in all age groups but particularly in the 45-60 + age groups.

29. Diversity of Food and Drink Factory Worker VET Enrolments 29 | Source: Data prepared 9 March 2012, Market Analysis team, Skills Victoria. Enrolments of Food and Drink Factory workers from CALD, Indigenous and disabled groups has increased from 2008-2001.

30. Structural Steel & Welding Trades

31. Structural Steel & Welding Trades VET Course Enrolments 31 | Source: Data prepared 9 March 2012, Market Analysis team, Skills Victoria. Enrolments of Structural Steel & Welding Trades in Cert III Engineering - Technical and Mechanical Trade have slightly increased from 2008-2011. Enrolments in Cert III Engineering – Fabrication Trade has decreased by approximately 100.

32. Structural Steel & Welding Trades Age Profile of VET Enrolments 32 | Source: Data prepared 9 March 2012, Market Analysis team, Skills Victoria. The age profile of enrolments by Structural Steel & Welding Trades indicates higher enrolments in the 15-24 age groups. From 2008 -2011 there has been a slight decrease in the 15-19 age groups and an increase in 20-24 age group.

33. Diversity of Structural Steel & Welding Trades VET Enrolments 33 | Source: Data prepared 9 March 2012, Market Analysis team, Skills Victoria. Enrolments of Structural Steel & Welding Trades from CALD, Indigenous and disabled groups has increased from 2008-2011. There has been a reasonably high increase in disabled workers for this group.

34. Metal Engineering Process Worker

35. Metal Engineering Process Worker VET Course Enrolments 35 | Source: Data prepared 9 March 2012, Market Analysis team, Skills Victoria. Enrolments of Metal Engineering Process Workers in Cert II Engineering have increased from 2008-2011, while enrolments in Cert II Engineering – Production Technology has decreased.

36. Metal Engineering Process Worker Age Profile 36 | Source: Data prepared 9 March 2012, Market Analysis team, Skills Victoria. The age profile of enrolments by Metal Engineering Process Workers has increased in all age groups except the 15-19 age group. Is this to do with changes in VET in schools or school leavers age?

37. Diversity of Metal Engineering Process Worker VET Enrolments 37 | Source: Data prepared 9 March 2012, Market Analysis team, Skills Victoria. Enrolments of Metal Engineering Process Workers from the CALD group has increased from 2008-2011(likely due to funding support). Enrolments in Indigenous and disabled groups have decreased from 2008-2011.

38. Engineering Production Worker

39. Engineering Production Worker VET Course Enrolments 39 | Source: Data prepared 9 March 2012, Market Analysis team, Skills Victoria. Enrolments of Engineering Production Workers in all Certificate courses has increased from 2008-2011.

40. Engineering Production Worker VET Enrolments Age Profile 40 | Source: Data prepared 9 March 2012, Market Analysis team, Skills Victoria. The age profile of enrolments by Engineering Production Workers has increased in all age groups except the 15-19 age group. Is this to do with changes in VET in schools or school leavers age?

41. Diversity of Engineering Production Worker VET Enrolments 41 | Source: Data prepared 9 March 2012, Market Analysis team, Skills Victoria. Enrolments of Engineering Production Workers from the CALD and disables groups have increased from 2008-2011(likely due to funding support). Enrolments in Indigenous has decreased from 2008-2011.

42. Future direction

43. What this means? National Industry employment has fallen by 5.7% in the past 12 months and is forecast to reduce further over the next 5 years by 3.1%. Despite this decline the Manufacturing industry plays an important role as Australia’s Largest contributor to Gross Domestic Product (GDP), third largest exporter and fourth largest employing industry (1 million people). While Industry employment in Hume is expected to decline over the period to 2016 some occupations will experience growth (E.g. Product Assemblers) and / or remain constant. There has been increase in course enrolments for the industry in Hume. Growth is being driven by the Cert IV, III, II, I level qualifications. The majority of VET enrolments are in the 15-19 and 20-24 age groups. There has been the greatest growth in the 50-54 and 55-59 age groups. There has been an increase in the diversity of enrolments across the industry in Hume from 2008- 2011. The greatest increase has been in the proportion of CALD students. 43 |

44. Questions 1. What are the occupations that will experience greatest growth / decline over the next 10 years? 2. What is driving the increase in VET course enrolments over the period 2008-2011 given Manufacturing is a declining industry? 3. What is driving the growth in VET course enrolments in mature aged workers (50-60 years)? 4. What is driving the increase in the diversity of course enrolments? Espcecially in the CALD students? 44 |