The mid-market manufacturing sector in Australia has long been a vital pillar of Australia’s economy. In the face of rising costs and stiff competition from global manufacturing powerhouses like China and India, Australian manufacturers have demonstrated impressive resilience. They are not merely surviving these challenging market conditions, but indeed, they are thriving.
A recent research study conducted by Dynata for MYOB, involving mid-market business leaders and decision-makers from the Australian manufacturing sector, offers a compelling snapshot of this resilience. This study paints a picture of an industry that is not only weathering the storm but also looking ahead with an optimistic outlook for the future.
This blog post is more than a narrative of resilience and innovation; it’s a roadmap to the future of manufacturing in Australia. And importantly, towards the end, we will introduce a transformative solution that could significantly impact your manufacturing operations.
So, if you’re keen to understand why Australian manufacturing is a sector to watch, and how it could influence your business or investments, we invite you to continue reading. There’s a wealth of knowledge ahead, and a revelation that you won’t want to miss.
Despite the challenges of a highly competitive international market and rising costs, the Australian mid-market manufacturing sector is showing resilience. Our local manufacturers are performing solidly in a market that has remained uncertain, with prices for key inputs like energy and shipping that are wildly fluctuating.
Encouragingly, these manufacturers are confident they will see improvements in the economy and their own business performance. More than half of the manufacturers surveyed are expecting to see an increase in revenue over the next 12 months, while just a fifth reported a decrease in revenue. This is despite growing pressure from increasing costs and a challenging economic environment.
Looking ahead to the next 12 months, these manufacturers are confident they will see improvements in their own businesses and the economy as a whole. More than half of the manufacturers surveyed are expecting to see an increase in revenue over the next 12 months, while just a fifth reported a decrease in revenue. This is despite growing pressure from increasing costs and a challenging economic environment.
Challenges in Mid-Market Manufacturing
The Australian mid-market manufacturing sector, despite facing international competition, is resilient and ambitious, making significant strides in productivity through automation and digitisation.
However, it’s not without its challenges. Inflation impacts both the costs of goods and operational expenses, and a long-standing skills shortage has been exacerbated by border closures and migration disruptions.
Moreover, supply chain disruptions have posed significant challenges for a sector reliant on importing materials and exporting goods globally. Most Australian manufacturers anticipate these issues to persist for another six months to two years. Despite these hurdles, the industry’s resilience and adaptability underpin its robust growth ambitions.
Innovation in Mid-Market Manufacturing
The ‘make to order’ approach is currently more dominant in Australia, whereas, in New Zealand, the ‘make to stock’ workflow is more prevalent amongst local manufacturers polled.
Changes to Business Approach
Over the next 12 months, this will drive significant change in the industry. This includes a greater emphasis on ‘make to order’ processes which is likely driven by the need to reduce the costs of holding stock, while also providing greater choice and flexibility to respond to customer demand.
Investing in Innovation
Over 8-in-10 (83%) Australian mid-market manufacturers surveyed said they prioritise innovation. However, despite most focusing on innovation, only 47% of Australian manufacturers have an annual innovation budget, with 40% of this group spending between $20,000 and $50,000 per annum, and 39% spending over $50,000.
Investing Focus Areas
In the last 12 months, 70% of Australian manufacturers surveyed have invested in innovation, with a focus on improving production lines (43%), more automation (35%) and new management software (35%).
Digitisation in Mid-Market Manufacturing
The need to drive greater efficiency and productivity in order to remain internationally competitive has seen digitisation become a major focus for the manufacturing sector. Australian manufacturers show lower digitisation levels. Only 36% surveyed conduct over half their business digitally.
Looking Ahead in Mid-Market Manufacturing
Manufacturers in Australia are also expecting to see rapid change in their sector, with 81% surveyed saying they expect the industry to change rapidly in the next five years. Drivers of change remain consistent. Increased competition and automation growth are likely to shape the industry in the next five years.
Embrace the Future with MYOB Advanced Manufacturing
As we’ve seen, the Australian manufacturing sector is on a journey of digitisation and innovation. To navigate this journey successfully, mid-market manufacturers need the right tools. MYOB Advanced Manufacturing, is the answer.
- Cloud-Based Solution: Access your data anytime, anywhere. This cloud-based solution ensures your operations keep running smoothly, no matter where you are.
- Comprehensive Solution: MYOB Advanced Manufacturing is an integrated business management solution designed for manufacturing businesses.
- Cost Management: Capture total manufacturing costs, including material, labour, machine, tool, overhead, and outside processes, for informed decision-making.
- Bill of Materials: Provides both engineering and costed views of the entire product structure, aiding in decision-making.
- Competitive Edge: In a rapidly changing market, MYOB Advanced Manufacturing helps you stay competitive.
- Integration: IoT, integrating with other software and trading partners
Ready to take your business to the next level?
Experience the power of MYOB Advanced Manufacturing with AlphaBiz Solutions. Book a demo today and unlock success in your manufacturing journey.