CBA recently released their "Manufacturing and Supply Chain Insights" report and it reveals that most Australian manufacturers & distributors are striving for greater output. Read on for the highlights and how having a finance team like CapStack on your side will play an important role in achieving this goal.
Highlights of the report include:
1. Production Output Growth: 61% of manufacturing, wholesale trade, and distribution businesses in Australia expect a moderate or significant increase in production levels in 2024.
2. Regional Production Expectations: Western Australia (71%) and Queensland (67%) lead in expected production increases, with Victoria (58%), South Australia (58%), and New South Wales (54%) also anticipating growth.
3. Financial Optimism: 83% of businesses are confident in revenue and profit growth over the next 12 months, driven by anticipated increases in production.
4. Cost-Related Challenges: The top issues impacting businesses are energy prices (80%), inflation (74%), and interest rates (72%), which are driving cost concerns.
5. Adapting to Customer Preferences: Businesses report significant changes in customer preferences, with demands for lower prices (32%) and faster delivery (31%) being prominent in the past year.
6. Labour and Equipment Shortages: Companies are facing persistent challenges with skill shortages and outdated equipment, affecting their productivity despite high capacity utilization rates.
7. Investment in Technology: To meet growing demand, 81% of businesses plan to increase their investment in technology and equipment over the next year.
8. AI and Machine Learning Impact: AI is recognized for improving demand forecasting, inventory management, and supply chain sustainability, though 62% of businesses face integration challenges.
9. Sustainability Efforts: Almost two-thirds of businesses have initiated sustainability programs, with 37% using renewable energy and 43% planning to adopt it, potentially increasing the average renewable energy mix from the current 33%.
10. Government Support: The Future Made in Australia Act aims to support domestic manufacturing and help businesses respond to the trend of customers preferring local or regional suppliers.
Download and read the report in its entirety here.
How can CapStack help?
An experienced business finance broker such as those at CapStack can help companies in the manufacturing, wholesale trade, and distribution sectors achieve their goals in 2024:
1. Securing Growth Capital: A business finance broker can help companies secure the necessary capital to invest in technology, equipment, and other resources needed to increase production and meet growing demand. This includes facilitating access to loans, lines of credit, and other financing options tailored to the specific needs of the business.
2. Optimizing Cash Flow: Brokers can assist businesses in managing cash flow more effectively by arranging financing solutions like invoice factoring or supply chain financing. These solutions can provide immediate liquidity, allowing companies to manage operational expenses and invest in growth opportunities without cash flow constraints.
3. Navigating Cost Challenges: With rising costs due to energy prices, inflation, and interest rates, a finance broker can help businesses find cost-effective financing solutions. This includes refinancing existing debt at lower interest rates or securing funding with favourable terms that mitigate the impact of these cost pressures.
4. Facilitating Technology and AI Investments: To enhance productivity and competitiveness, businesses need to invest in advanced technologies such as AI and machine learning. A finance broker can identify and arrange funding options that support these strategic investments, ensuring that businesses can implement the latest innovations to improve efficiency and supply chain management.
5. Supporting Sustainability Initiatives: Many businesses are advancing their sustainability efforts, such as adopting renewable energy. A finance broker can provide access to green financing options, including loans and grants specifically designed for sustainability projects. This can help companies reduce their environmental impact while potentially lowering operational costs in the long term.
6. Financing Commercial Property Purchases: For businesses looking to expand their operations or establish new facilities, a finance broker can assist in securing commercial property loans. These brokers can navigate the complex landscape of commercial real estate financing, helping businesses acquire the necessary properties to support their growth and operational needs.
By leveraging the expertise and resources of a business finance broker, companies in the manufacturing, wholesale trade, and distribution sectors can effectively address financial challenges, capitalize on growth opportunities, and achieve their strategic goals in 2024 and beyond.
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Why CapStack?
When it comes to securing the right financing for your business or commercial property acquisitions and projects in Australia, CapStack is the partner you can trust. With unparalleled expertise, a vast network of lenders, personalised service, and data-backed insights, we are committed to your success. Get in touch with CapStack today and unlock the full potential of your commercial ventures with our expert property finance services.
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