Food and beverage manufacturers in Australia recorded higher revenue during the summer period last year, according to the latest Manufacturing Health Index from Unleashed Software.
The increase came despite global economic volatility and domestic cost-of-living pressures.
“The holiday period provided a vital boost for lifestyle-focused manufacturers,” said Jarrod Adam, head of product at Unleashed. “It’s a clear indicator that despite broader cost-of-living pressures, there is still resilient demand for high-quality, Australian-made consumer goods.”
The report draws on data from more than 500 Australian manufacturing companies across sectors. This includes food and beverage, clothing and fashion, and construction.
In the final quarter of the year, average revenue for beverage manufacturers reached $627,000. This was an increase of almost $200,000 from the previous quarter and the highest level recorded since Unleashed began collecting data. Gross profit margin rose to 35.9 per cent from 31.9 per cent in the previous quarter and from 27.8 per cent in the same period last year.
In the food segment, average revenue reached $709,831. The figure was lower than $733,000 in the third quarter but higher than $546,229 in the same quarter last year.
Inventory strategy shifts
The report also shows Australian manufacturers adjusting inventory strategies as supply cycles tighten. Companies in Australia continue to refine inventory levels, while firms in the UK and New Zealand have increased restocking.
“Australian businesses are moving quickly,” Adam said. “The disconnect we’re seeing between lower stock levels and higher purchase values suggests a move toward just-in-time replenishment. Firms aren’t sitting on mountains of cash tied up in inventory. They are buying precisely what they need to meet immediate demand.”
Average stock on hand (SOH) declined to $233,763, while purchasing activity increased by 22 per cent. Lead time averaged 17 days in the final quarter, lower than the average recorded last year. The report notes that the construction sector shows a shift toward this inventory model.
“The challenge for 2026 is productivity,” Adam said. “Manufacturers must leverage technology to manage these tighter cycles and ensure they have the visibility required to avoid stockouts during demand spikes, without sacrificing the lean efficiency they’ve worked so hard to achieve.”
Interest rates and energy costs remain factors
Interest rates are expected to remain a factor for the manufacturing sector this year. The Reserve Bank of Australia (RBA) raised the cash rate to 3.85 per cent in February, the first increase after a period of holding or reducing rates in 2025. The RBA expects inflation to peak at around 4.2 per cent in the middle of the year before returning toward the 2.5 per cent midpoint target by mid-2028.
Governor Michele Bullock said another rate increase remains under consideration for the March policy meeting. Conflict in the Middle East may add uncertainty to the economic outlook.
Higher energy prices may increase material and transport costs, placing pressure on company margins. Changes in shipping operations may also affect lead times.
Unleashed said manufacturers are shifting focus from cost management toward scaling operations. Companies are adopting automation and real-time data systems to manage purchasing cycles. Smaller companies may face greater exposure to global economic changes, but may also adjust operations more quickly.
