Changes in the International Competitiveness of Australian Manufacturing: 1968 to 1989

Disaggregated data for twenty-seven Australian manufacturing industries are used to examine movements in international price competitiveness relative to each of sixteen major trading partners over the period 1968 to 1989. The changes in price competitiveness are decomposed into elements of exchange rates, tariff rates, profit margins and unit production costs. Great diversity in outcomes is found across both industries and trading partners, with differences in the growth of labour productivity and the cost of materials most closely associated with divergence in outcomes. The results show that domestic manufacturing industries have been able to achieve improved international competitiveness, where they have outperformed comparable industries in Australia's trading partners in terms of labour productivity growth or reductions in the costs of materials.