Federal Industry Minister Kim Carr has shown great confidence in the future of manufacturing despite a wave of job losses, dismissing worries about long-term viability as a furphy.

Manufacturing has suffered a series of hits in the past year with big job losses in the automotive industry along with cuts at Boeing’s Melbourne plant.

 Senator Carr pointed to an extra 24,300 manufacturing jobs added since November.

“This employment and output growth gives me great confidence in the future of manufacturing,” Senator Carr told a conference in Melbourne.

“We can’t allow the furphy that manufacturing is in terminal decline to gain ground.”

However, Senator Carr admitted manufacturing faced a battle to prosper.

The Manufacturing sector’s employment market shows a noticeable softening in hiring intentions in the October - December quarter of 2008, with a Net Employment Outlook of +13% showing that just 13% of industry employers will have jobs on offer, and this a considerable decline of 15 percentage points from the previous quarter (+28%).

“Business as usual isn’t good enough,” he said.

“To make the industry sustainable in the long term we need to tackle the twin challenges of climate change and increasing competition for oil head-on.

“That will require a lot more innovation and a lot more investment.”

Federal Chamber of Automotive Industries president Mark Reuss said Senator Carr’s comments were very encouraging as the sector faced financial and environmental pressure to change.

“Australia needs a car industry that uses frontier technologies to increase fuel efficiency and reduce greenhouse emissions,” Reuss told the conference, quoting Prime Minister Kevin Rudd.

According to Stephen Hinch, General Manager Marketing & Communications, Manpower, Australia and New Zealand “Whilst we have seen a softening in the intention to hire new staff, driven by a fall in business confidence, it may not be a signal for a slowdown in net growth. This is because this industry may well be propped up by the high levels of vacancies, which now stands at over 18,500. This will mean that jobs demand will be back around 21% by June-July 2009.”

We can clearly see a disaggregation coming through in Australia’s labour market, as some industries such as the Mining and Construction sector continues to be a strong economic driver and grow from strength to strength; while other industries such as Manufacturing and Wholesale & Retail Trade begin to shrink, following a tightening in consumer confidence. Business Leaders must also continue to think of strategies not only to attract the right talent, but more importantly how to retain them, as the Manufacturing industry added 32,500 in the December to February period and then shed 8,500 in the following three months March to May and may well just be stifled by this lack of supply” said Hinch.