By contrast with the large trends apparent in the labour market over the 40 years to February 2020, industry employment trends became more marked over the 20 years to February 2020. During the later period, trends such as the shift in employment away from manufacturing to service-based industries have become particularly pronounced.

This section focuses on pre-COVID-19 employment dynamics for the 20-year period to February 2020. For more analysis of structural change in the labour market, including the effects on industry, occupation and skill level of employment from COVID-19, see Chapter 3.

Over the 20 years, before the impact of COVID-19 on the labour market, employment increased strongly, up by 4,230,700 or 48.3%. Figure 15 shows that at an industry level, this growth was reflected in some key compositional changes to the structure of the labour market. For example, employment grew in 15 of the 19 broad industries as the labour market underwent a continuation of long-term structural change.

The health care and social assistance industry recorded the strongest growth of any industry over the 20 years to February 2020, with employment rising by 977,400 (119.4%). The growth recorded over the period saw health care and social assistance move from Australia’s third largest employing industry in February 2000 to the country’s largest employing industry by February 2020. The share of total employment accounted for by health care and social assistance increased by 4.5 percentage points over that period.

Other labour-intensive service-based industries to record large growth in employment over the 20 years to February 2020 included:

• professional, scientific and technical services – up 601,500 or 106.2%
• education and training – up 506,700 or 81.9%
• construction – up 499,000 or 72.9%
• public administration and safety – up 353,700 or 75.1%.

By contrast, employment growth in production-based industries was weaker or declined. For example, manufacturing was the largest employing industry in Australia 20 years ago, accounting for 12.0% of total employment. Employment in manufacturing decreased by 132,600 (12.6%) over the 20 years to February 2020, while employment across all industries increased by 48.3%. As a result, manufacturing was Australia’s seventh largest employing industry at February 2020, accounting for 7.1% of total employment. Despite the long term decline recorded in the industry, manufacturing remains a large employing industry within the Australian economy, with 922,800 workers at February 2020.

Table 1 shows that as well as manufacturing, three other industries recorded falls in employment over the 20 years to February 2020:

• agriculture, forestry and fishing – down 109,700 or 25.2%
• information media and telecommunications – down 5,500 or 2.5%
• wholesale trade – down 4,200 or 1.1%.

Table 1: 20-year change in employment by industry, February 2000 to February 2020

Source: ABS, Labour force Australia, detailed, seasonally adjusted

All sectors (ANZSIC 3-digit industry groups) within the health care and social assistance industry increased in employment over the 20 years to February 2020. Employment growth in the industry is underpinned in the longer term by ongoing population growth and an ageing population, as well as more recently the roll out of the National Disability Insurance Scheme.

Figure 16 shows that the largest sectoral increase in employment within the health care and social assistance industry over the 20 years to February 2020 was recorded in ‘other social assistance services’, with employment in the sector tripling over the period (up by 229,100 or 200.6%). The ‘other social assistance services’ sector includes employment in adoption services, youth welfare services, disabilities assistance services, welfare counselling, and aged care assistance services.

As Table 2 shows, other sectors that recorded strong employment growth over the 20 years to February 2020 included hospitals (up by 222,300 or 82.0%), allied health services (up by 151,700 or 156.7%), residential care services (up by 122,300 or 88.8%) and medical services (up by 93,300 or 102.5%).

As at February 2020, the hospitals sector was the largest employing sector in health care and social assistance (employing 493,300, or 28.1% of total employment in the industry), followed by ‘other social assistance services’ (employing 343,300 or 19.6%) and residential care services (employing 259,900 or 14.8%).

Table 2: Health care and social assistance, 20-year change in employment by sector

Sources: ABS, Labour force Australia, detailed, seasonally adjusted by NSC

Figure 17 shows that the majority (11 out of 15) sectors within the manufacturing industry recorded declining employment over the 20 years to February 2020 ¹⁷. Various factors have contributed to the trend of declining employment in such production-based industries, including strong global competition, offshore processing of natural resources and an increase in the capital intensity of production in the industry due to increased automation.

There has also been a change in the nature of manufacturing activity in Australia, with a recent focus on adding more value in pre-and post-manufacturing activity, such as research and development, design, sales and after-sales service ¹⁸. 

A noteworthy exception to the trend of declining manufacturing employment in the Australian labour market is the food product manufacturing sector, which recorded strong employment growth over the 20 years (up by 66,600 or 39.0%). The beverage and tobacco product manufacturing (up by 7,400 or 31.9%) and basic chemical and chemical product manufacturing (6,800 or 14.0%) sectors also recorded employment growth.

As Table 3 shows, all other sectors within the manufacturing industry recorded declining employment, with over half (57.7%) of the gross decline in manufacturing employment accounted for by the three sectors with the largest declines:

• textile, leather, clothing and footwear manufacturing – down 57,100 or 64.4%
• fabricated metal product manufacturing – down 39,800 or 38.8%
• transport equipment manufacturing – down 30,900 or 32.9%.

Table 3: Manufacturing, 20-year change in employment by sector

Sources: ABS, Labour force Australia, detailed, seasonally adjusted by NSC