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Australian manufacturers are navigating a challenging environment. Just as output had returned to growth, higher fuel and freight costs, rising input prices and global supply chain disruption renewed pressure on margins and cash flow.
CommBank’s new Manufacturing Signals Report shows that economic factors are creating headwinds for domestic manufacturers, with the outlook hinging on the resolution of geopolitical tensions, the resilience of business investment and the strength of consumer demand.
Managing through cost pressure and supply chain disruption
As with previous cycles, many manufacturers are focused on maintaining competitiveness and financial strength. Longer cash flow conversion cycles are sharpening the need to manage working capital, liquidity and balance sheet strength, while businesses are also preserving capacity for future investment where growth, productivity and competitiveness remain priorities.
CommBank is supporting manufacturers with specialised solutions to help manage fluctuating cash flows and immediate liquidity needs, as well as secure or upgrade assets. These include working capital facilities that unlock value from inventory or unpaid invoices which can assist as businesses navigate a higher cost environment and payment delays.
“Freight costs and supply chain costs are very top of mind for most Manufacturers at present,” says Andy Squires, Executive Manager, Commercial Banking at CommBank. “Manufacturers are also dealing with skilled labour shortages, and thinking carefully about how they fund inventory, investment, and growth.”
Manufacturers, such as Delta Panels, are responding by taking greater control of inventory and supply chains. At a recent Australian Manufacturing Week panel discussion, Delta Panels founder, John Guy, said the business moved from secondary suppliers to importing directly from factories to improve reliability and secure stock availability, supported by trade and working capital facilities.
The industry is also responding with a focus on productivity, redesigning roles and processes, and evaluating how AI and automation can assist amid rising costs and skilled labour shortages.
Using consumer spending to reflect end-user demand
Demand conditions remain critical for all manufacturers, but the signals differ across sectors and end-markets. For manufacturers supplying consumer-linked markets, recent consumer spending data from the Manufacturing Signals Report provides a timely view of downstream demand, helping identify where activity is improving, stabilising or slowing.
For food and beverage manufacturers, one of Australia’s largest manufacturing sectors, consumer demand has strengthened over the past year. CommBank iQ spending data shows spending on food and beverage goods lifted 4.8% year-on-year to $243.8b, with momentum continuing in March 2026.
That demand growth is creating opportunities for manufacturers who continue to invest, such as Remedy Drinks, who partnered with CommBank to secure working capital facilities to support inventory management, export growth, and expanded production capacity as the business scaled globally.
Other consumer end-markets, including consumer goods, home improvement related goods, electronics, clothing, and auto parts and accessories, have also recorded year-on-year spending growth. Domestic manufacturing output does not always reflect the same momentum, particularly in sectors with import competition. However, the Manufacturing Signals Report shows strengthening end-market demand remains an important signal for onshore businesses seeking to compete and grow market share.
Demand signals and resilience across manufacturing
The Manufacturing Signals Report brings multiple perspectives together, exploring the macro forces influencing the outlook for all manufacturers alongside consumer spending trends in key downstream sectors.
For CommBank, we’re committed to sharing timely insights into the forces shaping manufacturing and to backing businesses with specialised solutions that help them manage cash flow, access liquidity, and secure the assets they need to grow.
Read the full report
Discover demand insights and performance drivers. Read the CommBank Manufacturing Signals Report now.
Sources: CommBank iQ transaction data in the period between April 2025 to March 2026, and where relevant, compared to annual spending between April 2024 and March 2025; Australian Bureau of Statistics (March 2026) Consumer Price Index, Australia; Australian Bureau of Statistics (April 2026) Building Approvals, Australia; Australian Industry Group (March 2026) Australian Industry Index; S&P Global (March 2026) Australia Manufacturing PMI.
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