Article by Paul Robson, CEO of MYOB
Discussions regarding the performance of the Australian manufacturing sector have been reignited lately. With many facing cost pressures, alongside investment constraints, increasing global competition and regulatory challenges, these concerns are understandable. However, there is another story at play. Beyond the headlines lies a sector that is evolving; investing, innovating and adapting for a new era of opportunity.
Resilient and ready for growth
Manufacturing has long been a key contributor to our economy’s health. The sector’s strengths lie in its innovation, specialisation in advanced and niche manufacturing, adaptability and strategic connections across the Asia-Pacific region. While any large-scale closure inevitably sends ripples through communities and supply chains, these challenges do not tell the whole story.
According to MYOB’s latest mid-sized business research, 49% of the Australian manufacturers polled saw growth in the past year, and 58% expect growth in the next 12 months. These are not the numbers of a declining industry, they are the hallmarks of one that is recalibrating for future success. They also indicate that mid-sized manufacturing businesses, while not the largest players, may have an outsized influence on the broader sector.
A key shift is happening right now: one in four manufacturers (25%) surveyed are prioritising growth in local markets rather than exports. This reflects reinvestment, a conscious decision to build stronger domestic capabilities, closer customer connections and more resilient supply chains.
Turning challenge into opportunity
Australia’s mid-sized manufacturers are responding to global pressures in smart, practical ways. Many are investing in automation and digital systems to improve efficiency and competitiveness, with MYOB research showing 43% of mid-sized manufacturing businesses in Australia are using technology to optimise operations and streamline supply chains.
Australian businesses are also increasingly sourcing locally to reduce exposure to global supply chain shocks. Recent figures released by Chartered Accountants of Australia and New Zealand suggest 45% of Australian manufacturing firms are bringing sourcing and production back domestically.
A collective effort
Supporting a thriving manufacturing sector requires collaboration across business, government and education. From energy policy to workforce training, we need aligned efforts to make sure manufacturers have the conditions to succeed, especially as the global economy shifts toward renewables, technology and sustainable production.
The Albanese Government has set an ambitious productivity agenda to spark a reversal of the slow productivity growth Australia has experienced over the past few decades. Mid-sized businesses, including those in the manufacturing sector, have an important role to play. Despite being relatively small in number, mid-sized businesses account for around 30 per cent of private sector gross value added and employment across the economy.
Manufacturing sits at the heart of a range of policy initiatives and getting the policy settings right will not only pay economic dividends but will also be integral to the success of the Government’s Future Made in Australia reform. Protecting local supply chains and bolstering the health of regional centres that manufacturing hubs call home will play a key part in this. Put simply, Australia cannot afford to ignore manufacturing.
A confident outlook
Yes, manufacturing in Australia is facing change, but change does not equal decline. The sector’s evolution reflects its ability to respond to shifting realities with creativity and resilience.
As MYOB’s research shows, many manufacturers are not waiting for conditions to improve; they’re making them improve. They’re investing, innovating, and finding ways to grow, even when the pressure is on. Mid-sized businesses are already contributing heavily, let’s make sure they can continue to do this for the success of Australian manufacturing and our economy overall.
