none

STRONG SEPTEMBER QUARTER FOR INDUSTRIAL SUPPLY MANUFACTURERS

16-10-2014
by 
in 

Manufacturers in the industrial supply and service community servicing major projects were best performers in the September quarter while distributors struggled.

The latest Projectory Quarterly Survey of Business Expectations found that distributors were the largest group of suppliers at 25 per cent classified by core business, reporting sales revenue down in the September quarter compared to the previous quarter.

This was followed by Tier 2 suppliers servicing EPCMs e.g. engineering design and civil construction contractors at 20 per cent; Tier 4 sub-contractors - servicing Tier 2 and Tier 3 firms; and professional services at 15 per cent respectively.

Distributors were also bleakest in their outlook with 50 per cent of respondents from distributor companies forecasting weaker conditions in the major projects economy in the December quarter and 67 per cent forecasting weaker conditions in the next 12 months.

Just over half of all respondents that reported sales revenue as down said their company had cut their workforce in the September quarter.

On the other hand manufacturers had a strong September quarter with 40 per cent of respondents from manufacturers reporting sales revenue as up.

Across the board business expectations were down in the September quarter compared to the June quarter in sales revenue, profits, marketing investment and new job hires.

Respondents with an annual sales turnover of $10 million to $50 million felt the pinch most acutely.

Investment in building and structures was up five per cent on expectations for the quarter while investment in plant and equipment was down marginally.

Wage growth remained steady while non-wage labour costs and overtime utilisation were more than double expectations.  Selling prices increased marginally for the quarter.

A total of 30 per cent of all respondents said their company had cut their workforce in the September quarter.

The industrial supply and service community supplying major projects was also somber about the December quarter with 48 per cent expecting flat business conditions and nearly a quarter reporting somewhat weaker conditions.

The outlook for the major projects economy over the next 12 months was slightly more optimistic.

Manufacturers in NSW were most buoyant accounting for 40 percent of respondents from manufacturers by state. This was followed by Victoria (25 percent), Western Australia (20 percent) and Queensland (15 per cent).

Manufacturers were also most optimistic in their outlook with 78 per cent expecting sales revenue to increase in the December quarter; 22 per cent of respondents from manufacturers expect sales revenue to be flat.

Related news & editorials

  1. 18.10.2018
    18.10.2018
    by      In
    Amidst global concern about plastic waste in the world’s oceans, it is rather ironic that it is a soft drinks company that is actually doing something about the problem. SodaStream International, which has always taken a different approach to the soft drinks market, is now taking a different... Read More
  2. 16.10.2018
    16.10.2018
    by      In
    The Government has unveiled a $5 million scheme to encourage high-quality graduate engineers to work in Australia’s automotive sector. The Automotive Engineering Graduate Programme aims to increase the level of advanced engineering skills in the sector and is part of the $100 million Advanced... Read More
  3. 15.10.2018
    15.10.2018
    by      In
    Industry Update is delighted to announce that we are expanding our video offerings with a new series of tutorial style videos that perfectly complement our existing library of news style videos.
    In the first series, we are partnering with sensor specialist VEGA to publish eight playlists of videos... Read More
  4. 15.10.2018
    15.10.2018
    by      In
    Kennards Hire is certainly “doing its bit” to help Australia’s drought stricken farmers and their families. The work began with the Kennards branch network throwing itself behind the Buy a Bale initiative, and is now continuing with a key role in the Mega Farm Rescue.
    Kennards Hire team members... Read More