South East Melbourne emerges as Australia's top manufacturing zone

A new report by Deloitte Access Economics reveals that Greater South East Melbourne has now overtaken Western Sydney to emerge as the new heart of Australian manufacturing.

The ‘GSEM: Australia’s Manufacturing Powerhouse’ report — released on 23 September by the Greater South East Melbourne (GSEM) regional alliance — said the region supports more manufacturing jobs and businesses per capita than any other part of Australia. 

GSEM’s largest manufacturing sector is food manufacturing, with around 15,000 employees. Food manufacturing is also one of the fastest growing industrial subsectors in the region, which includes the local government areas of Cardinia, Casey, Frankston, Greater Dandenong, Kingston, Knox, Monash and the Mornington Peninsula.

Generating more manufacturing output than any other region, GSEM is home to 3801 manufacturing businesses which employ 75,046 Australians. This workforce has expanded strongly, with projected growth of 9.3% between 2016 and 2025. While over the same period, the national manufacturing workforce has shrunk by 0.5% and by 4.7% in Western Sydney.

The report also explored the unique characteristics of the GSEM industrial region, including:

• advanced capabilities in high-tech industries, such as materials, chemicals, pharmaceuticals and transport equipment;
• industrial clusters, such as the Australian Manufacturing and Material Precinct in Clayton and the Dandenong National Employment and Innovation Cluster;
• access to a skilled and growing workforce, with the region home to more than 1.5 million people and several key skills and training institutions, such as Monash University, Federation University, Chisholm Institute TAFE and Holmesglen Institute TAFE; and
• strategic location and proximity to key transport corridors, like the Port of Melbourne and Melbourne Airport, provide access to domestic and international markets.

“South East Melbourne is uniquely placed to lead Australia’s economic renaissance, with advanced manufacturing at the core,” Greater South East Melbourne Chair Simon McKeon AO said.

“The unique makeup of our businesses, industry hubs, geography and workforce position GSEM as a vital economic and strategic asset for Victoria and Australia, driving innovation, exports, and sovereign capability.”

Despite these strengths, the report warns that the region also faces threats that could constrain future industrial growth – risking job and economic growth. This includes limited land availability, skills challenges in emerging advanced manufacturing disciplines and ongoing freight infrastructure constraints.

The GSEM alliance is calling for coordinated action from the Australian and Victorian Governments to address these challenges. By doing so, the region can continue to drive Australia’s national prosperity into the future. Key recommendations include:

• proactive land use planning to unlock additional industrial capacity and support population growth;
• targeted infrastructure spending to bolster transport resilience and freight capacity;
• workforce development initiatives to attract and retain skilled talent, including stronger links between local education institutions and industry; and
• further government investment under the Future Made in Australia and Victorian Industry Policy strategies to help manufacturers scale, innovate, and compete globally.

“Our political leaders need to recognise and celebrate the immense contribution of Greater South East Melbourne, while also continuing to protect and invest in its future,” McKeon said.

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