Grant Thornton has released its 2025 Manufacturing Benchmarking Report, offering a comprehensive snapshot of Australia’s mid-sized manufacturing sector and highlighting the importance of innovation and adaptability amid economic headwinds.
The annual report draws on financial data from 100 Australian manufacturers with revenues between $20 million and $600 million, revealing how businesses are navigating cost pressures, supply chain disruptions, and global competition.
While the manufacturing sector continues to face a complex and cost-conscious environment, the report identifies a cohort of top-performing companies achieving significant growth.
“From our analysis, it’s clear that success in the industry hinges on the ability to manage cost pressures and complexity while continuing to invest in capability, innovation and technology,” said Michael Climpson, National Head of Manufacturing at Grant Thornton.
These top manufacturers achieved an 18 per cent increase in sales this year – six times the industry average of 3 per cent.
The stronger performers also retained more earnings, allowing them to invest in automation, product development, and digital infrastructure, positioning them well for future growth.
However, the report also points to signs of a broader economic slowdown. Businesses with annual revenues below $75 million experienced a notable drop in gross margins – from 36.2 per cent to 32.6 per cent – while those above $75 million saw a slight improvement, from 31 per cent to 33 per cent.
EBITDA multiples fell to 8.3 times, marking the second consecutive year of decline. This downward trend reflects the ongoing impact of inflation on input costs.
Despite the margin pressure, manufacturers with revenues under $75 million recorded an improvement in EBITDA, suggesting effective cost control strategies in a challenging environment.
“The current economic slowdown provides an opportunity to re-evaluate future strategies,” Climpson said.
“This could involve securing government grants for investments in technology and innovation, exploring new product lines and markets, or leveraging mergers and acquisitions to enhance scale and diversify operations.”
