More Investments Await Australia’s Manufacturing Sector in 2018

industrial cutting tools in front of cnc milling machine center in tool workshop manufacturingAustralia’s manufacturing sector continues to perform well in the last quarter of 2017, which indicates that the next year will be a positive one for the industry, according to a survey.

The Australian Chamber of Commerce and Industry-Westpac conducted the poll for the three-month period. It expects public and private investment to buoy the industry coming into 2018, despite some concerns about a neutral growth on consumer spending.

Industry Outlook

James Pearson, head of the Australian Chamber of Commerce and Industry, cited flat consumer spending as a potential issue for the industry. Still, this problem may hold no bearing if tax cuts on personal income will materialise in the future.

Prime Minister Malcolm Turnbull expressed his support for such incentives, as well as reducing the tax rate for all businesses. Pearson said that it would help in putting “money in people’s pockets,” which will then encourage Australians to spend on products and services.

An upward trend in employment also indicates that many businesses aim to fill jobs related to a rise in new orders. Since the manufacturing industry would continue to grow in 2018, warehousing solutions such as longspan racking systems will also be in demand.

Analyst Insights

Simon Murray, Research Analyst at Westpac, said that public investments in infrastructure partly uplifted the manufacturing industry’s performance in December. Investments in non-mining activity and a low currency also serve as positive factors.

However, Murray echoed Pearson’s concerns on muted consumer spending as a result of stagnant salary growth. He also cited an increasing level of competition from overseas manufacturers as another negative factor.

Still, the general consensus remains bright for Australian manufacturers, partly because of the increase in new orders and production, according to Murray.


It remains to be seen whether the Australian manufacturing industry will continue its growth streak in 2018, but the current trends somehow provide encouraging news for the sector.