Business View Oceania - May 2024

OPENING L INES SME MANUFACTURERS FACE REVENUE DECLINE BUT BUDGET MAY PROVIDE A BOOST Source- https://insidesmallbusiness.com.au/ , Editor Inside Small Business, First Published 29th, 2024 Australian SME manufacturers saw their sales revenues take a dip this quarter after enjoying their best quarter in five years, according to inventory management software brand Unleashed. The Unleashed Manufacturing Health Index however found that despite the 12 per cent dip in average sales performance since the end of 2023, the sector overall has maintained its upward trajectory at 11 per cent year-on-year. “As supercharged inflation starts to cool, it’s laid bare how these high interest rates are cutting into the amount of spare change Australians have, which hits at the heart of our local manufacturers,” Unleashed’s Head of Product, Jarrod Adam, said. Only two of the 12 subsectors (beverages and building/ construction) saw increases in revenue over the quarterly period, with a 24 per cent and six per cent increase respectively. Beverages in particular has had an impressive revenue trajectory at 43 per cent year on year, the highest of any subsector, while building/ construction has had a 13 per cent year-on-year revenue trajectory. Adam pointed out that the recent ‘Future Made in Australia’ Budget may see a change on the horizon for some of these sectors. “For local manufacturers like those in food who are producing more costly, higher quality goods, they’ll be particularly sensitive to tightening consumer spending,” he said. “But on the flipside, last week’s Budget allocation is a massive boost for other parts of our manufacturing sector, giving them long-term confidence for reinvestment.” Another bright spot for the manufacturing sector is the quickening of lead times as supply chain conditions improve. In fact, lead times have dropped by 55 per cent since the tail end of last year, down to just 14 days on average, a new record for the manufacturing industry in the last five years. The report noted that these improvements are both a symptom of normalising supply chains globally and the knock-on effect of Australian business’ laser focus on logistics over the past three years. Most evidently, 7 BUSINESS VIEW OCEANIA VOLUME 06, ISSUE 05