As a cornerstone of the Australian economy, the manufacturing industry represents a large portion of this country’s past, present and future. In fact, according to the Parliament of Australia, it accounted for 6.5 per cent of the nation’s total gross domestic product (GDP) and supported close to 1 million jobs in 2013-14.
It is then pleasing to note the continued strength of this vital sector as highlighted in the most recent Australian Industry Group/Australian Performance of Manufacturing Index.
Published on December 1, the index revealed that this sector grew for the fifth straight month – recording a positive 2.3 per cent lift to reach 52.5 points. Of course, any reading above the 50-point mark highlights an industry in expansion rather than contraction.
What manufacturing areas are growing?
Based on the index, more than half of the eight manufacturing sub-sectors continued to expand in November, including:
- Wood and paper products (67.2 points)
- Non-metallic mineral products (58.0 points)
- Petroleum, coal, chemical and rubber products (57.4 points)
- Food and beverages (52.4 points)
- Textiles, clothing, footwear, furniture & other (52.0 points)
Ai Group Chief Executive, Innes Willox explained that there were a number reasons for the positivity within the wider manufacturing industry.
“Improvements in sales, exports, production, new orders and employment underwrote another stronger manufacturing performance in November,” he said.
“The more positive conditions are due to the more competitive level of the Australian dollar; the considerable cost savings and other efficiencies that manufacturers have introduced over recent years; and continuing strong demand from residential construction businesses.”
How to address the challenges moving forward
For all the benefits of the manufacturing industry, there are many challenges ahead that business leaders must address. According to KPMG’s 2015 Global Manufacturing Outlook Survey, the profitability of enterprises in the sector have been affected by high costs in everything from energy and labour to transport and currency.
To keep growth and innovation high, most organisations are adopting new manufacturing technologies.
As such, to keep growth and innovation high, most organisations are adopting new manufacturing technologies (48 per cent). Others are increasing research and development investments (44 per cent) or establishing new partnerships to drive innovation (36 per cent).
How can Advanced Business Manager help?
With a manufacturing management system on board, business leaders can ensure they remain competitive in this highly complex industry. The package includes Advanced Business Manager’s core accounting system as well as software to help with business intelligence and warehousing.
For more information on how we can assist your manufacturing enterprise, contact our team today.