TXM Lean Solutions, an international lean consulting company headquartered in Australia, has released its Manufacturing Global Snapshot Report, outlining what it describes as a challenging operating environment for manufacturers across Australia, the UK, New Zealand, the US and Canada over the past year.
According to the report, most manufacturers surveyed experienced soft sales demand, with more than half identifying weaker demand as their most pressing issue.
TXM said “virtually all” companies also reported significant increases in costs, particularly labour and raw materials, contributing to subdued business performance. Around 75% of businesses were operating at the same level or worse than the previous year.
Despite this, the report found variations across regions. Australian manufacturers reported slightly more favourable current conditions compared to their counterparts overseas, though they expressed lower optimism about the future.
Two-thirds of Australian respondents reported difficulty recruiting staff, a proportion significantly higher than that seen in other countries.
Manufacturers were divided on their expectations for the economic outlook. Roughly equal numbers anticipated conditions improving or deteriorating over the next 12 months, while 25% expected no change.
TXM said half of Australian respondents expected conditions to worsen, while 50% of UK manufacturers predicted improvement.
The report found that in response to rising costs, 70% of manufacturers were focusing on productivity improvements, with more than 30% identifying cost reduction and margin improvement as top priorities for 2025. However, only 36% planned to invest in automation or new technology as a cost-reduction measure.
It noted that improved software emerged as the leading area of technology investment, with 80% of manufacturers investing in software upgrades. Half of the companies surveyed were investing in robotics and automation, while 15% reported pursuing artificial intelligence solutions.
Despite these investments, TXM said the benefits often fell short of expectations. Sixty percent of manufacturers investing in software and 50% investing in automation said the technology failed to fully meet expectations, while fewer than 10% said outcomes exceeded them.
TXM Managing Director Tim McLean said the findings underscored the importance of careful planning when adopting new technology.
“Businesses must continue to invest in technology to stay relevant. However our survey confirms the need to take care to choose the right investments and execute well to avoid disappointing results,” he said.
The report highlighted high upfront costs as the leading barrier to technology adoption, with 55% of manufacturers citing cost pressures. People-related challenges, uncertainty about integration with existing systems, and concerns about return on investment were also identified as significant factors hindering adoption.
Supply chain adjustments remained widespread, with around 70% of manufacturers reporting changes since the COVID-19 pandemic. According to TXM, 30% brought manufacturing operations back in-house, while others shifted to domestic or nearby suppliers as part of broader efforts to improve supply chain resilience.
Lean manufacturing continues to be the preferred approach to improving operational performance, with almost 60% of manufacturers planning to adopt Lean strategies. “It is reassuring that the Lean message still resonates with manufacturers and a majority still see Lean as an effective way to improve their businesses,” McLean said.
Despite ongoing pressures, the report found that manufacturers remain forward-looking, with almost 70% planning to expand operations in the year ahead. More than 40% aim to enter new markets, while over 30% are preparing to launch new products. Around 20% plan to hire additional staff, and 15% intend to relocate to larger or more advanced facilities.
TXM said the survey confirmed the difficulties manufacturers have experienced in recent years but noted a continuing focus on growth.
“The results of our Global Manufacturing Survey confirm what we have been hearing from our clients around the world. Times have been tough, but manufacturers remain optimistic and determined to grow,” McLean said.
The report concludes that while technology adoption remains important, many companies have been dissatisfied with recent investments, with TXM warning that the benefits of “industry 4.0” may have been overstated.
