Service industries on the rise
SOME Australian manufacturers may be left behind as the country produces more service industries, a senior central bank official says.
Reserve Bank of Australia assistant governor Philip Lowe said industries must embrace structural changes in the economy that have seen the manufacturing industry lose ground to a growing services sector.
‘‘ It’s very difficult for firms involved in that,’’ Dr Lowe said.
‘ ‘ To s eize t hese opportunities we need to have these evolving changes in the structure of our country. If we allow that, it’s likely we will do very, very well, even though on the individual ( manufacturing) firm level, some firms won’t do that well.’’
Earlier, Dr Lowe noted Australians were either saving recent wage increases, or spending them on non material goods and services, rather than manufactured goods such as televisions.
In economics, services defines a broad spectrum of industries such as financial services, gyms and IT.
The Australian dollar is currently trading above one US cent, creating tough conditions for Australian manufacturers, as exporters find it harder to compete with the cheaper prices overseas, and local sellers face cheaper imported goods.
Dr Lowe said the economy must also be flexible enough to respond to commodity price fluctuations and recent changes in the structure of the local economy.
Dr Philip Lowe