Australian manufacturers ended 2025 on a solid footing, maintaining healthy profit margins and strategic operational shifts despite a year of economic volatility, according to the latest Manufacturing Health Index from inventory management specialist Unleashed.
The report, based on data from more than 500 Australian firms across sectors including food and beverage, clothing and fashion, and construction, showed that Australian manufacturers achieved an annualised sales growth of 5.1%.
Average quarterly revenue settled at A$619,184, representing a minor 1.0% decline from the previous quarter. Profit margins remained resilient at 38.47%.
“Australian businesses are doing what they need to adapt in fast-changing environments,” said Jarrod Adam, Head of Product at Unleashed Software.
“The disconnect we’re seeing between lower stock levels and higher purchase values suggests a move toward just-in-time replenishment. Firms aren’t sitting on mountains of cash tied up in inventory; they are buying precisely what they need to meet immediate demand.”
The report highlighted a reduction in average Stock on Hand (SOH) to A$233,763 from over A$300,000, while purchase order values rose 22% to an average of A$415,000. Lead times remained low at 17 days, well below 2024 averages, supporting lean and responsive operations.
Holiday quarter sales provided an additional boost, particularly for lifestyle-focused sectors. Sporting manufacturers saw average revenue of A$231,876, while beverage manufacturers’ revenue increased from A$437,502 in Q3 to A$627,422 in Q4.
Clothing, footwear and accessories manufacturers recorded revenue of A$414,065, up from A$253,268 the previous quarter.
“The holiday period provided a vital boost for lifestyle-focused manufacturers,” Adam said. “It’s a clear indicator that despite broader cost-of-living pressures, there is still resilient demand for high-quality, Australian-made consumer goods.”
Construction manufacturing showed a slight quarterly revenue decline of 3% to A$716,237, though revenue was up 63% compared with the same quarter in 2024. Rob Woolner, Managing Director of Autex, which produces acoustic panels and insulation products, said the sector remains strong.
“The market feels very buoyant in Australia, where there’s a huge investment in major infrastructure projects that flows through from large construction firms to smaller local manufacturers and contractors,” Woolner said.
“We’ve opened up manufacturing plants in Melbourne and Brisbane. These investments reflect the faith we have in the continued growth of the Australian market, where driving down lead times is critical to keeping projects on time and under budget.”
Looking ahead, Unleashed noted that interest rates and global developments could affect manufacturing performance in 2026. The Reserve Bank of Australia raised the cash rate to 3.85% in February, with another increase possible at the March meeting. Rising energy and supply costs, driven by geopolitical tensions, may pressure margins and lead times.
“The challenge for 2026 is productivity,” Adam said. “Manufacturers must leverage technology to manage tighter purchasing cycles and ensure they have the visibility required to avoid stockouts during demand spikes, without sacrificing the lean efficiency they’ve worked so hard to achieve.”
This article contains information provided by Unleashed and is intended for general use only. It does not take into account your personal, professional, or business circumstances.
