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Mid-sized manufacturers are bullish about their prospects despite challenging economic conditions, according to a survey.
Accounting software firm MYOB's poll of 305 mid-market manufacturing firms on both sides of the Tasman found nearly 70 percent of local respondents expected their revenue to increase in the next 12 months, with more than half reporting stronger order books than usual at this time.
Just under two-thirds of New Zealand firms expect the economy to improve in the year ahead, while only 48 percent of Australian mid-sized manufacturers felt the same way.
It follows a challenging year for local manufacturers, with 44 percent saying current revenues were down on a year ago as they contended with the ongoing effects of the pandemic, rising inflation, skills shortages and the supply chain disruptions.
MYOB head of go-to market Jo Tozer said the survey found many respondents had increased investment in management software, automation of manual processes, and supply chain resilience, which had bolstered business sentiment.
"For businesses that want to thrive in any environment, innovation is absolutely key and the manufacturers we surveyed clearly recognise the meaningful impact changing their business approach and investing in innovation can have on their performance moving forward."
"With one-in-five mid-sized manufacturers we surveyed saying they had turned down customers because their current systems don't enable them to deliver to their requirements, it's clear there's an opportunity to grow their pipeline even further - one which they can't afford to be missing out on," Tozer said.
Australian firms demonstrated a greater willingness (47 percent) to change how they approach their business compared with local firms (31 percent).
Tozer said a key area of focus was shifting from "making to stock", which increased overheads for businesses, to "making to order".
The big three challenges NZ firms expected to face in the year ahead included the lingering effects of the pandemic, increased cost of goods, and disruptions to supply chains.
In the next five years, mid-sized manufacturers expected increased competition would become their biggest concern.
Tozer said this was influenced by more smaller manufacturers their intention to scale up in the future.