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Australian manufacturers and distributors to expand production, says survey

CommBank’s new Manufacturing and Supply Chain Insights report revealed that 61 per cent of manufacturers are targeting a moderate or significant uplift in production levels in the next year.

The report is based on a survey of manufacturing, wholesale trade and distribution businesses.

In contrast to those who see an uplift in production, only 6 per cent predict a decrease, with the remainder holding steady.

Production forecasts are robust in Western Australia and Queensland, with 71 per cent and 67 per cent anticipating an increase, respectively.

Victoria and South Australia both showed forecasts of 58 per cent while New South Wales was at 54 per cent.

At a national level, most businesses are also forecasting revenue and profit growth in line with rising output.

This is reflected in business optimism, with 83 per cent expressing confidence in conditions over the next 12 months.

CommBank’s National Head of Manufacturing and Wholesale Trade Maria Christina said that elevated costs and customer expectations have increased the focus on productivity, skills, labour, and addressing outdated equipment.

“To grow capacity in step with expected demand in 2024, businesses are doubling down on investment in technology and equipment, and upskilling employees. These initiatives help optimise operations and the workforce in pursuit of productivity.

“The Government’s newly announced Future Made in Australia Act will seek to support the efforts already underway. This could also help the domestic sector respond as many downstream customers gravitate to local or regional suppliers,” said Christina.

With the top goal of improving productivity, 81 per cent of businesses are planning to increase technology investment in the next 12 months.

Among the emerging technologies set to impact the industry most, those enabling supply chain efficiencies and artificial intelligence and machine learning top the list.

The potential benefits of artificial intelligence are widely recognised, with two in three saying it improves demand forecasting and inventory management and makes the supply chain more sustainable.

Many manufacturers and distributors are also advancing their sustainability journeys with almost two in three having advanced sustainability initiatives.

37 per cent have adopted renewable energy or on-site generation, with a further 43 per cent planning to follow.

Should those intentions materialise, the current average proportion of renewables in the energy supply mix will increase.

According to businesses, this is currently 33 per cent of total energy usage across the supply chain.

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