Australian manufacturing recorded a stronger third quarter, with small and micro manufacturers increasing sales, expanding margins and reducing excess stock levels, according to the latest Unleashed manufacturing report.
The inventory management platform reported that the average SMB manufacturer grew sales by 9 per cent to $625,400 in the quarter ending 30 September, while profit margins rose by 3.2 per cent.
The Unleashed report noted that although revenue remained 3.7 per cent lower than the same period last year, the quarterly turnaround reflects improved resilience and disciplined inventory management.
“In spite of cautious consumer spending, spiking energy prices and high labour costs, Australian small and micro manufacturers have been adapting and thriving,” said Jarrod Adam, Head of Production & Distribution at Unleashed.
“Manufacturers have found pockets of demand and capitalised on them.”
According to the report, SMB manufacturers sharply reduced inventory levels by 33 per cent to $311,200 per business, while purchasing of raw materials fell 34.9 per cent.
Lead times improved significantly, dropping 36 per cent quarter on quarter to 16 days, signalling what Unleashed described as a return to supply chain stability.
Adam said the findings point to a decisive operational shift within the sector. “The real story is operational awareness,” he said.
“Firms have focused on growing revenue and expanding profitability without tying up capital in excess stock. That’s a fundamental shift from the pandemic era of buffer building.”
The report also featured industry perspectives, including commentary from Marianna Amato, CEO of Visit Brands. She said improved planning behaviour among customers contributed to stronger Q3 performance.
“People are more aware of lead times now, and they want to make sure stock is ready to go for seasonal demand, so Q3 ended up outperforming previous years,” Amato said. She added that rising interest in quality and ethical sourcing “is going to benefit the wider Australian manufacturing sector.”
Sector-specific data in the Unleashed report highlighted food manufacturing as the strongest performer, recording 42.1 per cent sales growth to $733,254 and expanding margins to 30.87 per cent.
Construction manufacturers also delivered sustained growth, with sales up 17.6 per cent to $739,841 and inventory reduced by more than 40 per cent.
The beverages sector showed a contrasting trend, with revenue down 28.2 per cent to $437,502 compared with Q2.
The report noted, however, that beverage manufacturers maintained stable margins, lifting profitability to 31.95 per cent while reducing stock by 20.6 per cent.
Adam said the overall gains highlight the impact of data-driven decision-making. “Lead times down 36 percent, stock down 33 percent, purchasing down 35 percent, yet margins up nearly 4 percentage points. This is what disciplined inventory management looks like when manufacturers have real-time data and the confidence to act on it,” he said.
