Boom causing concern from manufacturers

23 May, 2008 05:37 PM
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THE economic boom is destroying part of WA’s manufacturing base, agriculture machinery makers say.

As a result of the lopsided expansion caused by mining, the state’s builders of farm equipment are facing an uncertain future with mounting costs from blowouts in steel prices, a tightening of supply of machinery components and a declining skilled workforce.

In combination, the pressures have severely impacted on the makers’ productive capacities to a point where manufacturers will not be able to meet domestic demand in the immediate future.

Since January, steel suppliers have increased steel prices 8pc to 20pc every six to eight weeks.

Depending on the products, this has meant prices have risen over the past five months between 30pc and 100pc.

In the same period, there has been a serious decline in skilled labour, based on anecdotal reports from manufacturers.

No government figures were available.

To compound manufacturers’ problems, the ripple effect of supply shortage has caused long delays in deliveries for tyres, chrome rods for hydraulic cylinders, wiring harnesses, hydromotors, bearings, seals, transmissions and even rota-moulded tanks.

Tractor and Machinery Association (TMA) executive officer Vin Delahunty has warned that the long-term labour shortage will eventually impact on mining companies.

"At the moment the mining companies are sucking out skilled labour from agriculture but that is a finite labour pool," he said.

"There is a great need for a focused government and industry initiative on this problem.

"Many companies and machinery dealers have sourced labour from overseas but this is only a band aid measure and the problem is only going to grow."

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