RDP 9106: The Direction of Australian Investment from 1985/86 to 1988/89 Appendix 2: Trade Ratios for the Manufacturing Sector

The ABS withheld unpublished manufacturers' sales data at the estimation industry level for four estimation industries on the grounds of confidentiality. In these cases ratios were calculated using data at the next higher level of aggregation.

The Australian Standard Industrial Classification (1983) is comprised of four levels:

• divisions (e.g. Mining (B) and Manufacturing (C));
• subdivisions (e.g. metallic minerals (11) and textiles (23));
• groups (e.g. non-ferrous metal ores (112) and clothing (245)); and
• classes (e.g. bauxite (1121) and men's suits and coats (2452)).

Note that the estimation industry classification scheme that we have from the CAPEX survey (Appendix 1) is a mixture of the ASIC subdivision and group levels.

Note that the proportion of domestic production exported in non-ferrous metals was calculated to be close to one and in some quarters greater than one. The results for this subdivision are very sensitive to measurement errors because exports do account for such a large proportion of sales and imports are negligible.^[22] In addition, production in a year could be less than exports in the same period if there was an offsetting stock adjustment.

Generally import penetration ratios for manufacturing industries have not exhibited any significant trends over the period 1985/86 to 1988/89. The exceptions are chemicals and petroleum and fabricated metal products for which import penetration ratios have risen substantially over the period. Horton and Wilkinson (1989) report a rising trend in the endogenous import penetration ratio from September 1986. However, our findings are still consistent with those of Horton and Wilkinson. Firstly their definition differs slightly from ours and is an economy wide penetration ratio (they use the ratio of imports to non-farm sales). Secondly when taking annual averages of the data they used, both the endogenous and the total import penetration ratios fall from 1984/85 to 1986/87 then rise strongly to 1988/89 (see Table 8). These results are comparable to those ratios we calculate for some manufacturing industries, in particular motor vehicles and parts and other transport equipment.

Footnote

BIE encountered the same problem, see BIE (1989) footnote p. 86. [22]