Advisory, finance, and tax firm Grant Thornton has released its 2023 Manufacturing Benchmarking Report, analysing the financial data from 100 Australian mid-sized manufacturers and tracking their performance during FY23.
The Report has revealed positive trends in 2023, with a 6.7 per cent year-on-year average sales growth.
This is attributable to increased capital expenditure and investing into emerging technologies, particularly for businesses with revenue over $100m whose scale has supported ongoing growth and success.
National Head of Manufacturing at Grant Thornton, Michael Climpson, said Australia’s manufacturing sector is still navigating disruption and that 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,” he said.
“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.”
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 both 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.
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.