Grant Thornton has unveiled its annual Manufacturing Benchmarking report for 2024, indicating that the manufacturing sector has demonstrated adaptability in the face of economic challenges.
The report, which collected data from 100 mid-sized Australian manufacturers, indicated that numerous manufacturers experienced growth in 2023 by implementing cost reductions and making strategic investments.
Despite inflationary pressures, the sector optimised operations and capitalised on opportunities, supporting sustainable growth.
Sales in the industry grew by 7.7 per cent, an increase from 6.7 per cent in the previous year. Businesses with revenues up to $40 million experienced significant growth, with sales increasing by 19 per cent.
“It’s clear the manufacturing sector has been able to rebound from the initial impact of COVID-19 and capitalize on the resulting opportunities for growth,” said Michael Climpson, National Head of Manufacturing at Grant Thornton.
He continued, “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 data revealed that 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.
The report also emphasised the importance of investing in 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.
