Manufacturing is the mainstay of the Australian economy and accounts for around three-quarters of all jobs.
However, the manufacturing sector has been on the decline for the past six months, with a sharp decline in August.
The Manufacturing and Investment Group (MICG) said it expects job losses of 1.7pc this year.
“While manufacturing has remained relatively resilient in recent months, the industry continues to experience a sharp slowdown in recent weeks,” MICG chief economist Stephen Conroy said in a statement.
In the July to September quarter, the Australian manufacturing sector shed 7.4pc, with the industry losing 7,974 jobs.
The unemployment rate for the manufacturing industry was 8.9pc, down from 10.9 per cent in June.
Industry job growth is expected to remain flat in the year ahead, with jobs expected to increase by 2.5pc.