Australia’s SME manufacturing sector has experienced some of the highest levels of revenue growth in the past 12 months, according to leading accounting software provider, MYOB.
This is despite facing headwinds from a high dollar and falling international demand.
In the September 2014 MYOB Business Monitor Report, 29% of SME manufacturing and wholesale business operators reported rising revenue in the 12 months to August 2014, compared to 21% of SME businesses overall. Businesses in the sector made up 8% of the national research sample.
The figures show a significant turnaround in the last six months, with the proportion of businesses seeing revenue decline falling from 43% in the March Monitor to 32% in the latest survey.
Looking out 12 months, businesses in the sector are even more positive about their growth prospects, with 35% projecting revenue will increase in the year to August 2015. Overall, 32% of SMEs expect revenue to grow by 2015. Those predicting revenue declines will fall further to 26% – though this is still higher than the 18% SME average.
Manufacturing and wholesale business operators are also more confident about the wider economy, with 31% expecting the economy to improve in the next year (24% overall).
Some of the sector’s revenue gains are expected to come in the next quarter, with 38% of the industry saying they are seeing more orders in the next three months, while 23% report that their quarterly work pipeline is reduced.
“Manufacturing is one of the key industries in our economy, says MYOB CEO Tim Reed. “Over recent years, it has struggled with a broad range of factors, from a dollar reaching record highs, to a rapid drop-off in demand from some of our key trading partners.
“It’s extremely pleasing, therefore, to see the sector turning a corner in this latest Business Monitor survey – demonstrating both the resilience and the productivity gains seen in the sector.”
With the industry in good heart, more manufacturing and wholesale business operators are looking to invest in creating new jobs and paying their people more. Over a fifth (21%) of business operators surveyed say they plan to increase the number of full time staff they employ in the next year, while over a quarter (26%), will invest in creating more part time positions. 21% also say they plan to pay their staff more in 2015.
The growth in the industry, however, could be under threat from a wide range of pressures, felt far more strongly in the sector than in other industries.
Attracting new customers, price margins and the cost of fuel all feature highly as pressures the sector will have to combat in the 12 months to August 2015.