Australia’s manufacturing industry has been steadily shrinking for decades. Higher labour and energy costs, coupled with worker shortages, have made local production increasingly uncompetitive compared to overseas alternatives. While the Albanese government has sought to revitalise the sector through its ‘Future Made in Australia’ policy, setting aside billions to support select industries, deeper challenges remain entrenched.
Among them is the urgent need to preserve a dwindling set of specialised trades, such as toolmaking and engineering pattern-making, without which local manufacturing cannot survive.
An Industry Veteran’s Return and Harsh Reality Check
Ron Conry, a veteran inventor known globally for designing an energy-efficient compressor with a 60 per cent global market share, returned to Australia during the COVID-19 pandemic. Having moved his business to North America in 2000 after receiving a $26 million Canadian government grant, Conry was motivated by patriotism to establish his latest venture, Conry Tech, back home.
Conry’s latest innovation is an air-conditioning system capable of cutting energy bills by 40 per cent, designed to retrofit into commercial buildings. However, his re-entry into the Australian manufacturing scene revealed that many of the challenges he faced decades ago still persist.
“Maybe it was stupid, or maybe not — it depends on how you look at it. We wanted to be patriotic,” he said. Despite Australia’s strengths in research and innovation, Conry found it incredibly difficult to raise capital and control rising production costs. He noted, “Australia is a very good place for getting brain power and getting new concepts and innovations done, but it’s a very hard thing to make products.”
A Critical Trade on the Brink
Conry and his business partner Sam Ringwaldt have also sounded the alarm about the rapid decline of a crucial but largely unheralded trade: toolmaking and engineering pattern-making. These trades, essential for manufacturing everything from simple plastic components to complex metal castings, have been hollowed out since the early 2000s and critically weakened following the collapse of Australia’s automotive manufacturing industry in 2017.
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Toolmakers and pattern-makers create and repair the precision tools and prototypes required to mass-produce parts for machinery, vehicles, and a host of other products. Without them, it is impossible to achieve end-to-end manufacturing domestically.
“There used to be quite a strong industry in Australia, supported largely by the automotive sector,” Ringwaldt explained. “But what we’ve found coming back is that there are very few operators left. Even companies that advertise toolmaking services often outsource the actual work overseas.”
Alarming Statistics Paint a Grim Picture
The decline is stark. According to Census data, there are now only 2,220 toolmakers and engineering pattern-makers left in Australia, representing a staggering 70 per cent decrease between 2006 and 2021. Of these, only 411 are under the age of 40, raising serious concerns about the long-term viability of the trade.
“It’s a real skill set that’s missing, which means that we’re almost at the point where it’s going to be impossible to do a 100 per cent manufacturing process in Australia from raw materials,” Ringwaldt warned.
Without these skilled trades, local manufacturers must increasingly source components offshore, turning Australia into an “assembly nation” rather than a true manufacturing economy.
Foundries and the Fight to Stay Afloat
The challenges are not limited to toolmaking. Australia’s foundries, which produce metal castings for industries ranging from mining to motorsports, have also been decimated. According to Alan Cooke, national vice president of the Australian Foundry Institute, the number of operational foundries has halved since 2000.
While demand for casting work remains strong, the industry’s ability to meet it is compromised by a critical shortage of skilled workers. “The real issues are around our ability to attract and find skilled people,” Cooke said. “We need young people to come in at apprentice, technician, and management levels.”
Opportunities for training new tradespeople are also dwindling. There is currently only one accredited TAFE apprenticeship program for engineering pattern-making in Queensland and one offered by a private RTO in Victoria, with the latter impacted by state government funding cuts.
Industry Capacity Undermined by Skills Shortages
Beckwith Group, a Melbourne-based metal casting business employing about 100 people, exemplifies the problem. CEO Rob Dalla Via says the company could easily hire another 50 staff if workers were available. However, the physical nature of the work and perceptions around its difficulty have deterred many young people from pursuing careers in the sector.
“We had a lot of work coming in from Hong Kong, some of which we had to decline because we didn’t want to jeopardise our local customer base,” Dalla Via said.
With local capacity stretched thin, Australian businesses increasingly face no choice but to outsource critical manufacturing processes, further eroding the country’s sovereign industrial capabilities.
Lessons from the Global Trade War
The importance of domestic manufacturing was underscored by recent global trade tensions, particularly the sweeping tariffs introduced by former US President Donald Trump. The uncertainty highlighted the risks of over-reliance on overseas supply chains.
“We see things happening in China, we see things happening in the US, and it’s clear that we need to have capability onshore in Australia,” said Ringwaldt. “If we are reliant 100 per cent for any given industry offshore, then we really have no bargaining power.”
In practice, a reliance on offshore production risks Australian businesses being sidelined or subjected to supply chain disruptions in times of geopolitical instability.
The Hidden Costs of Offshore Manufacturing
Beyond the risk of supply chain disruption, outsourcing critical components overseas also increases the risk of intellectual property theft. Conry, who successfully pursued an IP theft case in China in the 1980s, knows the risks all too well.
“Every time you send a drawing out to be manufactured overseas, you’re opening yourself up to more risk,” he said. While patents offer some level of protection, enforcement is expensive and often out of reach for small companies.
Manufacturing at a Crossroads
The situation is becoming critical. Manufacturing’s share of Australia’s economic output has plummeted from 14.9 per cent in 1990 to just 5.9 per cent today, ranking Australia last among developed economies for manufacturing self-sufficiency.
The list of major manufacturers exiting Australia continues to grow, from Incitec Pivot to Oceania Glass and Qenos. Without a robust local manufacturing base, Australia faces significant strategic vulnerabilities.
Tim Piper, Victorian head of the Australian Industry Group, stressed the broader implications: “We need to produce goods here. Not just for supply chains, but for our national psyche. There could come a time when overseas products aren’t available.”
A Slim Window for Revival
Conry and Ringwaldt have already received offers to relocate their venture overseas and acknowledge they can only persist against the odds for so long.
“We can only bang our head against this wall for so long before we have to make a decision,” Ringwaldt admitted.
Still, for now, Conry Tech remains committed to producing its innovative air-conditioning system in Australia — a gamble they hope will pay off both commercially and patriotically.
“There’s a lot of debate about whether manufacturing can ever be economical in Australia,” Conry said. “But I think that’s the wrong lens. The high cost of labour is an issue, but it’s not necessarily a problem if you are producing a high-tech, high-value product that solves real problems.”
In the end, slogans alone will not save Australia’s manufacturing sector. Concrete investment in skills, innovation, and local capability is urgently needed — before the skills and industries that once made Australia a manufacturing nation are lost forever.
