Grant Thornton's 2023 Manufacturing Benchmarking Report revealed positive trends in 2023, with a 6.7 per cent year-on-year average sales growth, attributable to increased capital expenditure and investing into emerging technologies.
Grant Thornton national head of manufacturing Michael Climpson said that while Australia’s manufacturing sector was still navigating disruption and would be for some time, opportunities for growth and development were on the horizon.
“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,” said Climpson.
According to the data, the financial impact of the initial Covid outbreak has been fully recovered in the sector, highlighting that the industry was witnessing the first emerging results of both government investment in sovereign manufacturing, and the resilience of the industry.
The data shows an increase in all market sizes, with the greatest increase in the $40m-$100m category, which was the manufacturing category impacted the most by Covid.
Like other industries, inflation is easing but remains at elevated levels, suggesting ongoing high sales growth for 2023/2024 could be expected.
However, headwinds including rising costs, inflationary pressures, and disruptions in supply chains have impacted cash flows, mainly for manufacturers with a turnover under $40m. To manage this, the report highlights affected manufacturers have turned to new and emerging technologies and invested in sustainability measures to remain profitable.
The data in the report was largely extracted from audited financial statements, the majority being Grant Thornton clients. The 2023 Manufacturing Benchmarking Report can be found here.
