Lower dollar proving good news for manufacturers

The drop in the Australian dollar and the fact that it seems to have found a new level of around 90 US cents has been welcome news for manufacturers.

As the Australian Financial Review reports, manufacturers are finding that the drop from near parity which was with us for some time has increased business activity.

“With a high Australian dollar, we were finding it hard to win new jobs, our customers were comparing the tooling and pieces cost with low-cost Asian countries and the cost of doing business here in Australia has put immense pressure on our profitability and was inhibiting our ability to win new contracts,” Dolphin Products' Mario Turcarelli said.

“[Since the dollar declined,] we have seen some increases in raw materials from some of our suppliers but we are also seeing more interest from local customers who are finding some bad experiences with quality issues and delivery issues with imported product.

“I believe many of those customers will switch back to buying in Australia.”

However, to put the plight of the manufacturing sector in long term perspective, employment within the industry is 15 per cent below the level in 1984 and the sector's gross value is flat compared to its value in December 2002.

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