In a similar fashion to many other industries, the manufacturing sector continues to ride the ebb and flow. These changes are a reflection of many different occurrences in the market, with pressures often turning into opportunities and vice versa.
As such, this is why the Australian Industry Group (Ai) is not too concerned with the manufacturing sector slipping into contraction over the last month. According to its most recent Australian Performance of Manufacturing Index, the sector recorded 46.9 points – 9.5 points fewer than the month previous. In fact, this marked the first time in over a year that manufacturing finished below the 50 point expansion mark.
Ai Group chief executive, Innes Willox, explained this in more detail.
Mr Willox did note that the new orders sub-index continued to expand, finishing at 51.5 points. This suggests that in the months ahead, the mismatch between production and sales will be cancelled out, and the sector can progress again.
"The continuing patchiness both of the manufacturing sector and the broader economy underscores the importance of lifting confidence and improving policy settings in areas such as workplace relations, taxation and budgetary policy," he concluded.
How to ensure growth during slower times
One of the challenges for business leaders when the sector is slowing is how to maintain positive growth of their individual enterprise.
Based on a Harvard Business Review (HBR) article, a key aspect to consider is advancing research and development techniques and approaches. By continuing to invest in new equipment and services, when the sector does peak again, the business is in the best position to take advantage of the conditions. HBR explained that most organisations will choose to yield new investment, but will then struggle to compete as the industry improves – negating any benefits.
This is certainly why investment is a key part of business success. By having the right tools, equipment or systems in place, any enterprise can grow and not rely on the fortunes of their industry as a whole.