The Australian Industry report states that manufacturing remains highly important to the economy given its contribution to overall productivity, its input to research and innovation, and its multiplier effects on growth. However, improved processes and investment in better equipment have seen Manufacturing employment decrease steadily over time.

While Manufacturing’s share of output has decreased in recent years, in absolute terms output has grown steadily (at least up until the Global Financial Crisis). The pace of this growth, has been slower than in the rest of the economy—resulting in Manufacturing’s share of output declining in relative terms. Manufacturing employees are generally less geographically mobile than in other industries. Nonetheless, regions have demonstrated considerable capacity to adjust in the face of the recent decline in Manufacturing employment as there has been 92,000 jobs lost in the manufacturing sector which  is due to the car manufacturing decline in Australia.

For more details: http://www.industry.gov.au/industry/Office-of-the-Chief-Economist/Publications/Documents/Australian-Industry-Report.pdf