The manufacturing sector in Australia has shown resilience and adaptability, achieving steady growth despite economic challenges, according to Grant Thornton’s 2024 Manufacturing Benchmarking report.
The report analysed financial data from 100 mid-sized manufacturers, revealing a 7.7 per cent increase in sales, up from 6.7 per cent the previous year.
Micheal Climpson, national head of manufacturing at Grant Thornton, noted “It’s clear the manufacturing sector has been able to rebound from the initial impact of Covid-19 and capitalise on the resulting opportunities for growth.”
He added, “The sector has shown consistent growth in sales over the past five years. Strong inventory management and consistent capital expenditure have allowed them to maintain a competitive edge and foster innovation.”
The report highlighted that businesses with revenues up to $40 million experienced significant growth, with sales increasing by 19 per cent. Companies with robust inventory turnover ratios, averaging 8.5, proved resilient and better equipped to respond to demand fluctuations.
A renewed focus on inventory management, along with closer monitoring of demand and optimisation of stock holdings, has enabled businesses to balance working capital requirements effectively.
In terms of investment, the report emphasised the importance of spending on innovations for efficiency, flexibility, and emerging technologies to future-proof growth. Capex investments remained steady at 3.3 per cent, with increased spending on research and development for electric vehicles and clean energy technologies.
Grant Thornton's report underscores the sector's ability to weather external pressures and capitalise on opportunities for sustainable growth.
The comprehensive analysis allows businesses to compare their performance against competitors, identify risks, seize opportunities, and influence strategic decisions to foster long-term growth.
