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Highlights
June quarter survey reveals moderate improvement in Australian manufacturing
Employment intentions and export activity remain areas of focus
Input costs and capacity constraints continue to influence sector operations
The survey noted a slight increase in production activity, driven largely by steady demand in core segments such as food manufacturing and intermediate goods. However, many manufacturers continued to flag constraints related to input sourcing, delivery delays, and elevated material costs.
Despite easing supply chain disruptions globally, many Australian manufacturers are still contending with extended lead times and logistical adjustments. These constraints, though not as severe as previous quarters, continue to limit the pace of output recovery in several sub-industries.
Employment Indicators Reflect Slight Recovery in Hiring Intentions
Employment intentions improved moderately in the quarter, with some businesses reporting plans to expand staffing levels. However, this optimism was tempered by ongoing skills shortages in specialised roles, particularly across advanced manufacturing and engineering sectors.
Businesses in regional zones also noted challenges in attracting qualified personnel, underscoring the broader structural issues affecting Australia’s manufacturing labour force. Nonetheless, wage pressure was less acute than in earlier quarters, reflecting a partial easing in labour market tightness.
Export Outlook Mixed Amid Currency Fluctuations
On the trade front, the outlook for exports remained mixed. While the lower Australian dollar supported competitiveness in international markets, respondents cited weaker demand across several key export destinations. As a result, export growth was uneven across manufacturing categories.
Some firms involved in metals and machinery manufacturing reported steadier orders from Asia-Pacific partners, while others in the consumer goods space faced softer demand from European markets. The divergence points to ongoing volatility in international trade patterns, compounded by geopolitical developments and trade policy adjustments.
Forward Orders Improve Marginally with Domestic Drivers in Focus
Forward orders showed mild improvement, driven by steady activity in construction-related manufacturing and government procurement projects. Businesses flagged public infrastructure and energy transition projects as key demand anchors, offering consistency even as private sector sentiment remains conservative.
The focus moving forward will remain on balancing production efficiency with cost controls, as companies look to maintain momentum in the face of evolving demand dynamics. The survey signals cautious optimism across the sector, with a steady foundation forming after several volatile quarters.
