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Tuesday, 25 November 1986
Page: 2662

Senator CROWLEY —Has the Minister for Industry, Technology and Commerce seen media reports of a major national survey released at the weekend by the Metal Trades Industry Association, which indicates that investment in new plant, machinery and equipment by the metal and engineering industry will rise by as much as 26 per cent in 1986-87? Does this increase seem to be industry-wide or are some sectors performing better than others?

Senator BUTTON —I have seen media reports, but I have also seen a copy of the survey itself which was released by the Metal Trades Industry Association on Sunday. The national survey was conducted in September and October this year. It covered 729 companies operating in nine different sectors of the metal and metal engineering industry. It showed that manufacturers have commenced significant re-equipment programs, which are expected to raise the industry's investment by about 26 per cent in this financial year. The survey suggests that large companies-those with a turnover of more than $50m-account for a major share of the expected 26 per cent investment rise. Expenditure by these companies is expected to increase by 34 per cent, following a rise of 27 per cent in 1985-86. The anticipated result in expenditure on new plant, machinery and equipment by these companies is large compared with the national figures as provided by the Australian Bureau of Statistics. Those figures show that spending on plant, machinery and equipment by all sectors of Australian industry is expected to rise by 1 per cent in nominal terms in this financial year and the expected increase for Australia's total manufacturing sector as being 7.5 per cent.

As the MTIA has pointed out, the findings of the survey are significant for two reasons: First, the fact that the metal and engineering sector is a major segment of the Australian manufacturing industry, accounting for half of the value added produced by all manufacturers in Australia; and, secondly, the results provide insights into how decision-makers in the metal industries view recent and expected economic developments. The perceptions of the respondents are important, for it is these respondents who make decisions as to who must invest, what products to produce, what efforts to put into selling goods overseas, whether Australian goods can be substituted for imported alternatives, and so on. Decisions on those issues will be quite crucial to Australia's economic performance in the near future. To that extent, and having regard to the fact that all surveys, whether gloomy or optimistic, must be qualified, to some extent, the survey conducted by the MTIA is very encouraging.