Ser­vice in­dus­tries on the rise

Townsville Bulletin - - Investor -

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

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