Report: Positive trends for manufacturing sector

Grant Thornton has released its 2023 Manufacturing Benchmarking Report, analysing financial data from 100 Australian mid-sized manufacturers and tracking their performance during FY23 to provide a view of the Australian manufacturing sector.

The report revealed positive trends in 2023, with a 6.7% year-on-year average sales growth. This may be attributed to increased capital expenditure and investing in emerging technologies, especially for businesses with revenue over $100m that have supported ongoing growth and success.

According to Michael Climpson, National Head of Manufacturing at Grant Thornton, Australia’s manufacturing sector is still navigating disruption, but there are opportunities for growth and development.

“While this is positive, there is still much work to be done and the government’s continued support in the sector — with initiatives such as the National Reconstruction Fund, R&D Tax Incentive and state-driven programs — will continue to empower mid-sized manufacturers to deliver on growth ambitions and strengthen our domestic capabilities,” Climpson said.

The data found that the financial impact of the initial COVID-19 outbreak has been fully recovered in the sector, highlighting the first emerging results of government investment in sovereign manufacturing, the resilience of the industry and a willingness to do things differently.

The data shows an increase in all market sizes, with the greatest increase in the $40m–$100m category, the manufacturing category impacted the most by COVID-19.

Like all other industries, inflation is easing but remains at elevated levels, suggesting ongoing high sales growth can be expected in 2023–2024.

Rising costs, inflationary pressures and supply chain disruptions have impacted cash flow, mainly for manufacturers with a turnover under $40m. The report found that affected manufacturers have turned to new and emerging technologies and invested in sustainability measures to manage this and remain profitable.

Grant Thornton used a sample of 100 Australia mid-sized manufacturers to create the 2023 Manufacturing Benchmarking Report. The data is largely extracted from audited financial statements, the majority of which are from Grant Thornton clients.

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