Grant Thornton has released its 2023 Manufacturing Benchmarking Report, revealing positive trends across the Australian Manufacturing sector in 2023, with a 6.7 per cent year-on-year average sales growth.
This, it shows, is attributable to increased capital expenditure and investment into emerging technologies, particularly for businesses with revenue over $100m whose scale has supported ongoing growth and success.
The 2023 Manufacturing Benchmarking Report analyses the financial data from 100 Australian mid-sized manufacturers and tracks their performance during FY23 to provide a unique view of the Australian Manufacturing sector.
Grant Thornton national head of manufacturing Michael Climpson said, “While Australia’s manufacturing sector is still navigating disruption and will be for some time, opportunities for growth and development are 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,” he added.
According to the data, the financial impact of the initial COVID-19 outbreak has been fully recovered in the sector, highlighting that we’re witnessing 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, which was the manufacturing category impacted the most by COVID-19.
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 that affected manufacturers have turned to new and emerging technologies and invested in sustainability measures to remain profitable.
Grant Thornton used a sample of 100 Australian mid-sized manufacturers to create the 2022 Manufacturing Benchmarking Report. The data is largely extracted from audited financial statements, the majority being Grant Thornton clients. The analysis can include an element of judgement applied, including normalising out of the averages any major outliers. For the purposes of this report, mid-sized manufacturers generally have an annual turnover of $20 million – $600 million.
To view the report, click here.
Comment below to have your say on this story.
If you have a news story or tip-off, get in touch at editorial@sprinter.com.au.
Sign up to the Sprinter newsletter