Regional manufacturers setting the pace compared to city competitors, CommBank says

Regional manufacturers are more positive about their future than those in the city and setting the benchmark for industry sustainability, according to a new CommBank report.

CommBank’s Regional Manufacturers and Distributors In Focus report said almost 90% of manufacturers in regional areas are confident about future conditions, with two-thirds of those surveyed expecting an increase in revenues and profits.

This bullish outlook sees two in three regional manufacturers looking to increase their output levels, a move supported by rising demand from local products.

Regional manufacturers’ optimism is also likely to lead to greater investments, with the report stating 83% of those surveyed plan to increase technology investment within the next 12 months.

CommBank Executive General Manager Regional and Agribusiness Banking Paul Fowler said ongoing investment in people and skills combined with an eye on productivity has kept these manufacturers moving from strength to strength.

“Regional businesses have been busy adapting to changing customer expectations, including demand for higher quality products and a preference for local suppliers. To lift output while managing persistent talent shortages, many manufacturers and distributors are searching for new ways to drive productivity and efficiency gains,” Mr Fowler said.

“According to our research, regional manufacturers are demonstrating stronger productivity and higher intentions to invest in supply chain efficiencies, technology and labour when compared to their metropolitan peers.”

These regional manufacturers are also setting the pace in sustainability compared to their metropolitan counterparts.

About 60% have implemented multiple sustainability practices such as using renewable energy.

“On average, regional manufacturers and distributors are sourcing 41% of their total energy supply from renewable sources, ahead of metropolitan businesses at an average of 30%,” the report said.

However, it is not all positive. The report added that high interest rates and rising energy costs are having a negative impact on the industry.

“Most expect fixed costs to keep rising, and labour and skills shortages are seen as the top drag on productivity,” the report added.