A recent joint analysis from Westpac and the Australian Chamber of Commerce and Industry has revealed a period of relative stability for the manufacturing sector.
Compared to July figures, the index rating for manufacturing dropped by 1.7 points in the September quarter. Despite the decrease, the current rating of 56.7 is positive, especially considering the historical average rating of 49 index points.
The trend for the year so far has exceed performance in 2014, with an average index rating of 57.4 compared to 52.4 seen at the same point in the previous year.
Particular areas of strength included a robust labour market with an index rating of 55.9 points and the potential for increased profits. From a survey of 288 professionals, 42 are expecting a rise in profits through to 2016.
Andrew Hanlan, senior economist at Westpac, highlighted a number of key drivers that have maintained a steady industry over the past six months.
“The considerable easing of monetary conditions, through lower interest rates and a lower dollar, is gaining traction and the manufacturing sector is a key beneficiary,” he said.
“Notably, new orders for manufacturers of building materials have increased as the home building sector enjoys its strongest upswing in a decade, in response to lower rates and pent-up demand.”
Outlook remains positive
In September, expectations into the future have grown overall. The Australian Chamber and Westpac assigned a rating of 59.8, a 1.4 increase from July quarter figures.
In order to maintain growth, KPMG stated that there are number of key considerations that business must look at. Many of these can be addressed through business management software.
The organisation emphasised the need for firms evaluate their global value chain and how each process step can deliver a unique benefit to customers. Careful analysis of each stage in the production process can help find the areas of potential improvement.
As the manufacturing industry continues to perform well, addressing these issues in your business will ensure you maintain a competitive position in the market.