Manufacturers supplying major industrial projects doing well: survey

Manufacturers in the industrial supply and service community servicing major projects were best performers in the September quarter, according to a survey.

The latest Projectory Quarterly Survey of Business Expectations revealed that distributors were the largest group of suppliers at 25 per cent classified by core business reporting sales revenue down in the September quarter compared to the previous quarter.

Distributors were also bleakest in their outlook with 50 per cent of respondents from distributor companies forecasting weaker conditions in the major projects economy in the December quarter and 67 per cent forecasting weaker conditions in the next 12 months.

Just over half of all respondents that reported sales revenue as down said their company had cut their workforce in the September quarter.

On the other hand manufacturers had a strong September quarter with 40 per cent of respondents from manufacturers reporting sales revenue as up.

Wage growth remained steady while non-wage labour costs and overtime utilisation were more than double expectations. Selling prices increased marginally for the quarter.

A total of 30 per cent of all respondents said their company had cut their workforce in the September quarter.

The industrial supply and service community supplying major projects was also somber about the December quarter with 48 per cent expecting flat business conditions and nearly a quarter reporting somewhat weaker conditions.

The outlook for the major projects economy over the next 12 months was slightly more optimistic.

Manufacturers in New South Wales were most buoyant accounting for 40 per cent of respondents from manufacturers by State. This was followed by Victoria at 25 per cent; Western Australia at 20 per cent; and Queensland at 15 per cent.

Manufacturers were also most optimistic in their outlook with 78 per cent expecting sales revenue to increase in the December quarter; 22 per cent of respondents from manufacturers expect sales revenue to be flat.