A message from Jens Goennemann

Australian manufacturing’s 26-month long run of uninterrupted expansion took a slight dent in December, before continuing its expansion in January. The Ai Group’s PMI® climbed to 52.5 points in January 2019, recovered by 2.5 points from December 2018.

This volatility should serve us as a reminder: we simply cannot take the prosperity of Australian manufacturing for granted.

Australia is home to one of the most volatile manufacturing industries in the world; on average Australian manufacturing industry swells 20% above its trend size in upcycles, and 20% below its trend size during downturns.

The good news is, companies can take concrete steps to mitigate this volatility.

Building Resilience

While compiling our Building Resilience in Australian Manufacturing Report, we uncovered what makes Australian manufacturers more resilient in volatile times. Resilient manufacturers were more likely to display one or more of the following three attributes: Superiority, Diversity and/or Flexibility.


Resilient manufacturers offer a superior product or service. These types of manufacturers regularly collaborate with research institutions, industry bodies and other suppliers. They invest strongly in R&D, build the skills and capabilities of their workforce, and adopt a servitisation model. They often develop services bundled with major projects to ensure their products cannot be substituted in the event of an industry contraction. Most importantly, resilient manufacturers innovate and remain ahead of their competitors. As a result, their products and services remain highly valuable and in demand—even if a downturn hits.


Resilient manufacturers diversify their business and operations across various products, services and market opportunities. They export their goods and services internationally, and capitalise on global supply chains and across different product types. In addition, they regularly identify new customers, which minimises their reliance on, and exposure to, a single industry, market or customer. By diversifying the nature of their business, resilient manufacturers are better able to respond to shifting consumer tastes and needs, as well as fluctuations in demand.


Resilient manufacturers operate an agile business model, with a flexible structure that allows them to readily cope with fluctuations in factors such as costs, demand and shifting consumer tastes and needs. They use customisable and modular production techniques and serve customers across a variety of industries, thereby mitigating their risk.


There is room for Australian manufacturers to make resilience an integral part of their business strategy.

So, as we embark on a new year, consider how you can embed a mindset of resilience in your business. Take advantage of the resources available to you through AMGC, from regular events and in-depth research, through to invaluable networking and collaboration opportunities. As you’ll read in this month’s AMGC News column, in 2019, we are focused on breaking down the barriers within Australia’s manufacturing industry to build resilience.

Embedding a mindset of resilience will help Australian manufacturers succeed in good times, and bad, and position the sector as an ongoing source of innovation and prosperity in the economy.