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Grant Thornton’s Manufacturing Benchmarking Report findings show opportunities for growth

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 to provide a unique view of the Australian Manufacturing sector. 

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.

“While Australia’s manufacturing sector is still navigating disruption and will be for some time, opportunities for growth and development are on the horizon,” said Michael Climpson, National Head of Manufacturing at Grant Thornton.  

“While this is positive, there is still much work to be done and the Government’s continued support in the sector with 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,” continued Michael Climpson. 

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.

However, 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 affected manufacturers have turned to new and emerging technologies and invested in sustainability measures to remain profitable.

The state of Australian Manufacturing: 2023 Manufacturing benchmarks
The state of Australian Manufacturing: 2023 Manufacturing benchmarks
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** Research methodology of the Grant Thornton 2023 Manufacturing Benchmarking Report

Grant Thornton used a sample of 100 Australian mid-sized manufacturers to create the 2023 Manufacturing Benchmarking Report. The data is largely extracted from audited financial statements, the majority being Grant Thornton clients. The analysis can include an element of judgement applied, including normalising out of the averages any major outliers. For the purposes of this report, mid-sized manufacturers generally have an annual turnover of $20 million - $600 million.

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