The Australian Manufacturing Workers Union has warned of a looming crisis for the Australian manufacturing industry, despite the Morrison government's plan to boost the sector.
Industry Minister Karen Andrews used her National Press Club address on Wednesday to flag "significant changes" in Australia's manufacturing sector post COVID-19, including using the government's purchasing power to buy locally produced goods, slashing red tape and providing relief on energy costs for businesses.
She highlighted growth in the medical and food manufacturing sectors as proof of the sector's resilience.
"While the decline of the car industry has attracted media headlines, the fact is that many other sectors have been scaling and growing in recent years," Ms Andrews said.
"For example, food and beverage manufacturing has had 11 quarters of consecutive growth. The chemical sector, also grew at an increasing rate in April due to the strong demand for personal care item, pharmaceuticals, cleaning products, toiletries and health supplements - much of which are made locally.
"When I first called Ray at MedCon in February, they were the only Australian manufacturer of face masks, and his normal annual production was about two million a year. Now, by the end of this year , they will have produced 59 million masks. They have gone from 14 to 98 staff, and they will have significantly strengthened our ongoing sovereign capability for this vital product."
But Australian Manufacturing Workers Union national secretary Paul Bastian warned while some parts of the manufacturing sector were thriving, others were suffering.
Twelve per cent of people employed in manufacturing lost their jobs between March and April, Mr Bastian said, and the Performance of Manufacturing Index indicated the industry was facing the worst contraction since the Global Financial Crisis.
The steepest declines were in the metal, wood, textile and leather, printing and furniture manufacturing sectors.
'We have seen a ramp up in some specific industries and some retooling, but overall we're still seeing that collapse in forward orders for manufacturing," Mr Bastian said.
"Obviously manufacturing is tied to the construction industry and a whole bunch of other industries affected by this crunch. Demand across the economy is tanking and that really affects manufacturing."
The union called for a manufacturing commission to be set up to better support local industry and coordinate supply chains.
A national order book, where state and territory governments coordinated procurement for projects to ensure a steady stream of work, could also provide certainty for the sector, Mr Bastian said.
Governments also needed to bring forward "shovel ready infrastructure projects with maximum local content" to provide a pipeline of work for the sector.
"Our point is an energy policy is not an industry policy. The main issue that needs to be addressed is the pipeline of work over the next 10 weeks, 10 months and 10 years," Mr Bastian said.
"We need the government to take the lead on that with a coordinating role through a manufacturing commission."