Manufacturing Benchmarks 2026: Scale as a competitive advantage
Scale and investment capacity shape performance in Australian manufacturing
10 Aug 2026
Australian manufacturers are navigating a more challenging operating environment, while the latest benchmark data shows the sector’s strongest performers continue to grow, invest and improve profitability.
The Manufacturing Benchmarks report analyses the financial performance of 100 mid-sized manufacturing businesses across Australia, providing a view of how the sector is tracking across growth, profitability, productivity and capital allocation.
The report notes that scale is increasingly becoming a competitive advantage, although strong performance remains achievable across business sizes when supported by disciplined execution and targeted investment.
The benchmark data shows manufacturers generating more than $150 million in revenue recorded stronger average outcomes across several measures in the sample. These businesses achieved average growth of 5.6 per cent, compared with a 7.8 per cent decline among businesses under $75 million, while industry sales growth moderated to 4.1 per cent.
Michael Climpson, National Head of Manufacturing at Grant Thornton Australia, said the findings point to a more differentiated manufacturing sector, where scale can support performance but is not the only driver of success.
“Scale is becoming an increasingly important contributor to performance, particularly where it gives manufacturers greater capacity to invest, manage cost pressures and improve operational efficiency,” Michael said.
“But the story is not simply that bigger is better. The report shows strong performance remains possible across different business sizes, particularly where manufacturers are disciplined on pricing, working capital, productivity and investment decisions.”
The report also identified encouraging signs for the sector, with capital expenditure increasing as manufacturers continued to invest despite economic uncertainty. Many businesses are directing investment towards automation, productivity improvements, replacement assets and operational resilience.
However, challenges remain. Labour costs continue to rise across the industry, while working capital pressures are increasing as inventory holdings grow and payment cycles lengthen. These pressures can be more acute for smaller manufacturers, although the report also points to examples of margin protection and cost management across smaller operators.
“Smaller manufacturers are facing real pressures, but many are also taking deliberate steps to protect margins, manage costs and invest selectively,” Michael said.
“Looking ahead, sustainable growth is increasingly linked to productivity, disciplined investment and the ability to use scale effectively where it exists. For manufacturers of all sizes, the challenge is to make targeted decisions that improve resilience and support profitable growth.”
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