More than two-thirds of Queensland manufacturers expect to increase production in the next 12 months, according to a recent survey.
The CommBank’s latest Manufacturing and Supply Chain Insights report found that, nation-wide, 61 percent of manufacturing, wholesale trade and distribution businesses were planning a moderate or significant uplift in production levels over the next year.
CommBank Manufacturing and Wholesale Trade National Head Maria Christina said only 6 percent predicted a decrease, despite many citing ongoing challenges.
Ms Christina said production forecasts were robust in Western Australia and Queensland, with 71 percent and 67 percent anticipating an increase, respectively.
“Victoria and South Australia both showed forecasts of 58 percent while New South Wales was at 54 percent,” she said.
Ms Christina said at a national level, most businesses were forecasting revenue and profit growth in line with rising output.
“This is reflected in business optimism, with 83 percent expressing confidence in conditions over the next 12 months,” she said.
“However, as businesses strive for growth, they face persistent challenges. According to respondents, cost-related factors, driven by energy prices (80 percent), inflation (74 percent), and interest rates (72 percent), are set to be the highest-impact issues this year.” she said.
Around two in three also said changing customer preferences would have an impact in 2024.
“That follows reports that the top-rated shifts in customer behaviour last year were expectations for lower prices (32 percent) and faster delivery (31 percent),” Ms Christina said.
“While elevated costs and customer expectations have increased the focus on productivity, a shortage of skills, labour, and outdated equipment are holding businesses back.
“While manufacturers and distributors have been tested by economic uncertainty and labour shortages, most report healthy capacity utilisation rates – which measures the percentage of potential output that is being realised. In fact, more than half say utilisation is running above 85 percent, which is a testament to the resilience and innovation of Australian manufacturers,” she said.
“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 full report can be accessed on the CommBank website.
