Grant Thornton has released its annual Manufacturing Benchmarking report that shows the manufacturing sector has proven adaptability with many in the sector achieving growth in 2023 through reduced costs and strategic investments.
The 2024 Grant Thornton Manufacturing Benchmarking report provides a review of the financial data of 100 mid-sized Australian manufacturers and painting a unique picture of the Australian Manufacturing sector.
In the face of inflationary pressures, the manufacturing sector displays clear ability to optimise operations and capitalise on opportunities to support sustainable growth.
The data showed 7.7 per cent growth in sales for the industry, up from 6.7 per cent in the previous year.
Businesses with up to $40 million revenue experienced significant growth, with 19 per cent growth in sales.
National head of manufacturing at Grant Thornton, Michael Climpson, said the sector has been able to rebound from the initial effects of COVID.
“The sector has shown consistent growth in sales over the past five years, with strong inventory management and consistent capital expenditure allowing them to maintain a competitive edge and foster innovation,” said Climpson.
According to the data, companies with robust inventory turnover ratios – averaging 8.5 – proved robust, with higher ability to respond to fluctuations in demand.
A renewed focus on inventory management alongside closer monitoring of demand and optimisation of stock holding has allowed businesses to balance working capital requirements.
The report also shows the importance of investing in innovations for efficiency, flexibility, and emerging technologies to future-proof growth.
Data showed CAPEX investments consistent at 3.3 per cent and growth in spending on research and development for electric vehicles and clean energy technologies.