3 ways manufacturers can build on growth in 2018-19
Manufacturing enjoyed nearly two years of continuous growth in the lead-up to the end of the financial year. How can they build on this in 2018-19?
The latest manufacturing data caps off a successful end to the financial year for the industry. In fact, the Australian Industry Group (Ai Group) Performance of Manufacturing Index (PMI) revealed the sector has enjoyed 21 months of continuous expansion.
In June, manufacturing recorded a PMI score of 57.4, with any figure above 50 showing growth. Production, exports, sales and employment all improved during the month, suggesting the future looks bright. But how can manufacturers take advantage of this high-growth period and make 2018-19 a success on all fronts?
1. Invest in new equipment
Industry 4.0 is heralding in a new era of innovation in manufacturing technologies, with the Internet of Things, cloud computing and cyber-physical systems changing the way firms approach production.
"What we are seeing is not only product and process transformation, but business model transformation," John Pollaers, chairman of the Australian Advanced Manufacturing Council, said last year.
Not all businesses are at the forefront of industry breakthroughs, but most manufacturing firms can improve performance by investing in new equipment and technology. Is now the time to upgrade your systems and processes?
2. Go global
Australia's domestic market can only support a certain amount of manufacturing growth. Business leaders must establish themselves in the global supply chain if they wish to remain competitive, with emerging economies in Asia an obvious target.
While Australian manufacturers are unlikely to make an impact with mass-produced goods, they can develop niche consumer and industry products that appeal to Asia's burgeoning middle-class.
For example, CSIRO estimated China's middle-class population would grow from 300 million in 2016 to 630 million by 2022, consuming goods and services worth $4.6 trillion.
3. Attract and retain highly skilled workers
Skills shortages in the manufacturing industry are no secret. Sixteen per cent of manufacturing CEOs in Ai Group's 2018 Business Prospects report cited a lack of skilled employees as a major concern this year.
This was up from 5 per cent in 2016, indicating the growing pressure on firms to find the right candidates. In many cases, businesses must offer increasingly competitive remuneration packages to attract and retain the most highly skilled workers.
Manufacturers may also wish to consider graduate programs, structured training courses and industry placements to strengthen their workforces.
How can Classic Funding Group help?
The manufacturing industry is experiencing a period of sustained growth, and firms must act quickly if they want to take advantage.
But expansion plans require immediate capital, so you may need to consider business finance solutions to help support your ambitions. Please click the button below to contact a member of the team at Classic Funding Group.