Australia's Changing Industry Structure

Over the past the century, Australia’s industry structure has undergone fundamental changes, moving from an economy that was highly dependent on agricultural produce and manufactured goods, to today’s economy where service based industries are becoming increasingly important for employment.

Three decades ago, Manufacturing was the largest employing industry in Australia, accounting for 15% of total employment. Today, it is the seventh largest and accounts for 7% of total employment. The decline in Manufacturing has been caused by many factors, including increased competition from overseas manufacturers, who often have lower production costs.

People are also less likely to be employed in Agriculture, Forestry and Fishing than they were 30 years ago. In 1987, 6% of the workforce was employed in this industry, compared with 3% in 2017. This has been due to a combination of factors, including technology and automation. Nonetheless, this industry continues to employ more than 300,000 workers, particularly in regional areas.

The importance of the services sector to the economy has expanded rapidly in recent years, offsetting the falls in other industries. Today, more than three in every four Australian workers are employed in a service industry. Service industries can be considered to include all industries besides Manufacturing; Construction; Agriculture, Forestry and Fishing; Mining; and Electricity, Gas, Water and Waste Services, although, even within these industries, there are service components.

Much of the growth in the services sector has been driven by Health Care and Social Assistance. This industry has had strong employment growth, and with Australia’s aging population requiring more care, and the roll-out of the National Disability Insurance Scheme, this is likely to continue. Professional, Scientific and Technical Services has also recorded strong employment growth, doubling its share of employment over the past 30 years.

Share of total employment, 2017 and 1987 (%)

Sources: ABS, Labour Force (trend and annual averages of original data); ABS, Census of Population and Housing; NCVER, Apprentices and Trainees

For more information see lmip.gov.au