Manufacturing sector looking at a bright crystal ball

By Greg Bell

If you run a business that operates in the manufacturing industry, you could be part of a very positive movement occurring at the moment. Recent survey results have shown good confidence levels in the sector, which may lead to more inquiries about industrial leasing on the Gold Coast.

Expansion is key to making the most of any economic growth that occurs, and these confidence levels indicate many businesses in the manufacturing sector are ready to do exactly that. 

Expectations riding high

The Australian Chamber of Commerce and Industry (ACCI) works with Westpac to provide a quarterly survey of trends across a number of industries, and their focus on the manufacturing sector in the June quarter of 2015 has highlighted a number of positive factors.

Firstly, the Actual Composite Index rose by 2.2 points on the previous quarter, reaching 58.8. This means sentiment among industry players has been upbeat about current conditions. As for the future, this index has also increased. The Expected Composite Index is up to 57.0, and indicates how people feel about the future of the manufacturing industry. 

In fact, 32 per cent of respondents expect their profits to increase over the rest of the year. This could free up the money necessary to expand into new commercial real estate for sale on the Gold Coast. Fewer companies are interested in reducing their spending, while 11 per cent of businesses expect to increase expenditure on their equipment as well.

Overall, manufacturing is having a good year – and those involved expect it to get even better.

Why is this happening? 

There are a number of reasons why this positivity is occurring in the industry at the moment. Kate Carnell, CEO of the ACCI discussed this in an 18 June media release. 

"The combination of low interest rates, an easing local currency, support in the federal budget and rising home building activity is creating a virtuous groundswell. We finally have some reasons for our manufacturers to smile," she stated.

Particular industry elements that were cited as contributing to positive change were new orders, higher output and more overtime. Anyone interested in industrial leasing on the Gold Coast will be keenly looking at their own output to see if it is matching up with the overall sentiment. 

Additionally, there were measures in last year's federal budget that may be having long-term impacts for the industry. This includes the Manufacturing Transition Programme, which is a $50million fund to help businesses achieve greater stability and competitiveness. 

This fund can cover up to 25 per cent of costs for projects that cost less than $4million, and could be another factor in rising confidence.

What more can be done?

Ms Carnell noted that while confidence levels were good, there was still a lot more work that can be done to further boost manufacturing. 

"It is important that we consolidate the gains that have been made. We need certainty surrounding policy settings, which can best be achieved by the senate passing the key measures from the federal budget," she stated. 

"We also need a steady pipeline of high-quality infrastructure projects to overcome our growing infrastructure deficit and unleash productivity improvements."

On the Gold Coast, project like the rapid transit development, and local hospital redevelopment are two projects either recently completed or still underway that highlight an ongoing focus on infrastructure. If more funding is made available for local growth, it could boost confidence in manufacturing even further.

If your business is ready to expand to a larger site or perhaps open up a new site, industrial real estate on the Gold Coast offers a prime opportunity. Get in touch with Ray White Surfers Paradise for more information. 

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