6th October, 2022
On both sides of the Tasman, most larger manufacturing operations have reported an increase in booked orders or sales, according to new research from MYOB.
The past few years have been particularly difficult for businesses reliant on open borders and reliable supply chains, such as those in the manufacturing industry.
But this sector may be finally seeing the light at the end of the tunnel, according to a new report from MYOB.
Based on a survey of 305 mid-market business leaders and decision makers across Australia and New Zealand (representing operators in the manufacturing sector with 20-500 employees), the ‘Making Advances: Performance and innovation in mid-market manufacturing businesses’ report shares insights on current performance, outlook predictions as well as some key differences between the two regions.
MYOB’s General Manager for Enterprise, Kim Clarke says the survey findings demonstrate the resilience of businesses in this category.
“They are performing solidly in a market that has remained uncertain, with prices for key inputs like energy and shipping that are wildly fluctuating,” she writes in the report’s introduction.
“Even more encouraging, these manufacturers are confident they will see improvements in the economy and their own performance over the coming year.
“Jobs, production standards, sustainability, even international human rights – there are many good reasons why we should support and celebrate a thriving local manufacturing sector.”
While the overall tone of optimism shone through from respondents in both regions, the report also reveals where Aussie manufacturers and NZ manufacturers diverge — particularly regarding the challenges they face and their approach to meeting market demand.
For example, most Kiwi-based manufacturers surveyed continue to rate ongoing repercussions from the pandemic as a top challenge (52 percent), while that’s dropped down the list of concerns for Australian business leaders polled (38 percent) who were instead more likely to cite increasing costs of goods as a major challenge (55 percent).
When it comes to innovating, nearly half (47 percent) of Australian manufacturers surveyed are planning to change their business approach in the next 12 months compared to just 31 percent of New Zealand respondents.
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The report also delved into the specific approaches these manufacturers currently employ, revealing the ‘make to order’ model is more prevalent in Australia, while we continue to see the ‘make to stock’ model dominate in New Zealand.
Nevertheless, innovation is a stated priority for both cohorts with a strong emphasis on digitisation, and Clarke applauded New Zealand operators for leading the charge in this way.
“…to build on momentum gained this year, manufacturers will need to keep making strides in their productivity journey, like increasing automation and further digitisation of their business and production processes – an area where this report has revealed New Zealand is leading the way.
“Our survey has also highlighted that the next half decade will be a period of enormous change for the industry and it’s brilliant to see that one of the major changes expected was the return of manufacturing to Australia and New Zealand.”