Grant Thornton’s 2025 manufacturing benchmarking report shows adaptability and innovation key to success

Grant Thornton has published its annual Manufacturing Benchmarking report, examining the financial data of 100 mid-sized Australian manufacturers and presenting an overview of the Australian manufacturing sector.

Like most businesses across Australia, mid-sized manufacturers are navigating supply chain constraints, cost pressures and global competition. Yet the analysis shows a story of innovation and adaptation, with top performers growing revenue more than six times faster than average.

The top manufacturers delivered 18 per cent sales growth, compared to the industry average of 3 per cent this year. This allowed them to free up capital and invest in automation, product innovation and digital infrastructure.

However, while there's growth in the sector for those focused on strategic priorities, there is an overall softening reflective of a broader economic slowdown.

Manufacturers with revenue above $75 million increased gross profit percentage from 31 per cent to 33 per cent, while businesses below $75 million experienced a contraction in gross margin from 36.2 per cent to 32.6 per cent.

EBITDA multiples decreased to 8.3x, marking the industry's second consecutive year of decline in EBITDA margins, likely due to ongoing inflationary pressures impacting costs.

Michael Climpson, national head of manufacturing at Grant Thornton, said success in the industry hinged on the ability to manage cost pressures and complexity while continuing to invest in capability, innovation and technology.

“The current economic slowdown provides an opportunity to re-evaluate future strategies. This could involve securing government grants for investments in technology and innovation, exploring new product lines and markets, or leveraging mergers and acquisitions to enhance scale and diversify operations,” Climpson said.

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