Adam Sharnan, CEO LMAC Group APAC

Australian Manufacturing Week is an annual exhibition for the manufacturing industry, this year held in Melbourne between 6-9^th May.

Over the four days of the exhibition, the manufacturing industry comes together to share emerging technologies and services, share learnings and ideas and connect with partners across the industry.

With this year’s event taking place within days of the Federal election and the Labour Party’s return to power, the focus of the event was on lifting productivity of Australia’s manufacturing sector and, in turn, its contribution to lifting national GDP.

Not unlike, New Zealand’s manufacturing sector, Australian businesses are facing significant challenges.

Louise McGrath, Head of Industry Development and Policy at the Australian Industry Group highlighted slowing investment, a restrictive workplace relations system, an uncompetitive tax system, a complex regulatory environment, ongoing skilled labour shortages, and uncertainty over energy affordability and reliability (gas prices having risen by 49% in the last 5 years, contributing to an increase of 31% across all manufacturing inputs) as being the key headwinds facing Australian Manufacturers.

These issues are compounded by volatile international conditions and national security challenges, severely constraining the capacity and confidence to invest in business R&D, which is critical for innovation and productivity enhancement.

In response to these challenges, industry groups used the Australian Manufacturing Week exhibition to advocate for an industry-wide approach to lifting productivity and viability of the manufacturing industry focused on Digitisation (acceleration of productivity through the adoption of Industry 4.0 technology), Diversification (in to new and growing markets such as defence and hydrogen production) and Decarbonisation (to reduce reliance on high-cost energy inputs).

Prior to their election, the Albanese government outlined a federal industry support package focus around the National Reconstruction Fund (allocating $1 billion of its $15 billion budget to novel and innovative trade bases), the National Rail Manufacturing Plan (supporting locally made trains and rail infrastructure),

 Regional Employment Trials ($50 million over four years to address skill shortages in regional areas) and investment in renewable energy projects, including solar farms, wind farms, and battery storage facilities¹.

Whilst New Zealand’s manufacturing sector is performing slightly above its Australian counterpart (NZ PMI = 53.9 vs Australia PMI = 52.9 at 1^st April 2025)², our manufacturers are exposed to the same macro-economic headwinds and, whilst the PMI shows continued (slow) expansion, a similar focus on technology and innovation and diversification of markets and supply chains should be key priority for manufacturers and the New Zealand Government.

Reflecting on the themes of Digitisation, Diversification and Decarbonisation from Australian Manufacturing Week, it is important to consider the learnings that can be applied to the New Zealand context.

Digitisation

In New Zealand, uptake of digital and industry 4.0 technologies has been growing in the manufacturing sector.

However, New Zealand still lags behind the rest of the world, including Australia (where 84% of businesses report active progress in technology adoption according to the Australian Industry Group) when it comes to adoption, and where digitisation is adopted. The focus is often incremental gains rather than transformation³ for the purposes of new product development, new market access or growth ambition.

An industry-wide focus on building awareness of available technologies, building on the foundation created by the Industry 4.0 Demonstration Network delivered by Callaghan Innovation, is needed to ensure that New Zealand can be competitive in the global market, and exploit the opportunities created by its geographical and political position.

Diversification

The theme of industry diversification and agility discussed at Australian Manufacturing Week is as, if not more relevant for New Zealand’s manufacturing industry.

As global volatility increases, alliances change and market access shifts, new opportunities are created for a country regarded as stable, trustworthy and secure.

New Zealand, like Australia, is well positioned to exploit these opportunities in growth markets like aerospace, alternative energies, defence and electronics.

By focusing on supply chain security, data privacy and compliance (e.g. ISO 27001 certification) and innovation as strategic value drivers, New Zealand manufacturers can turn their geographic position into an advantage.

Decarbonisation

Whilst energy security and cost are less of an urgent consideration in New Zealand compared to Australia, it should not be ignored.

To meet the demands of supply chain resilience required by their customers, New Zealand manufacturers must consider how they maintain energy security to mitigate the risk of production loss in the case of (increasingly common) weather events and cyber attack that comprises energy availability.

With governmental pressure easing for organisations to be working towards net zero targets, there may be a temptation to reduce focus.

However, organisations should consider how decarbonisation can be a competitive advantage in market, particularly where the business’s brand and reputation is connected to the country’s brand in the global market.

Conclusion

Both Australia and New Zealand are grappling with economic challenges, including skills shortages and regulatory gaps, which impact their manufacturing industries.

However, both countries have reason to be optimistic about the opportunities created by leveraging technology, to drive productivity and growth.

With SouthMach happening later this month in New Zealand, it will be interesting to see the themes and priorities discussed against the comparison point from Australian Manufacturing week as businesses, governments and countries respond to a fast moving, uncertain environment.

1: Building Australia’s Future | Policies | Australian Labor Party

2: PMI | BusinessNZ

3: Industry_Insight-Manufacturing_report.pdf

 

Looking forward to SouthMACH 2025

As we look ahead to SouthMACH 2025, it is hard to avoid the national and global context in which this year’s event is set.

Global volatility and uncertainty, combined with a slow domestic economy are providing significant headwinds for New Zealand’s manufacturing industry.

With the country’s industry coming together in Christchurch, we are provided with an opportunity to learn from each other, share ideas and collaborate for the benefit of the industry and country as a whole.

Having recently attended the Australian Manufacturing Week exhibition in Melbourne and hearing the themes of digitisation, diversification and decarbonisation as priorities for Australia’s manufacturers, we will be paying close attention to see if these themes are replicated in the attendees, speakers and visitors to SouthMach.

With the shift in the support landscape occurring in the last 6 months e.g. the disbanding of Callaghan Innovation and, with it, the Industry 4.0 Demonstration Network, at LMAC we are proud to be playing an active role in the continuing awareness and capability development of the industry.

With this goal front and centre, we are pleased to be collaborating with the EMA, ASB and AspectPT to bring the Smart Manufacturers Workshop to SouthMach on both days.

 I will be presenting, as part of the seminar series on ‘Getting Started with Digital Transformation’, providing a practical guide to the first steps of a digital transformation in manufacturing and how this can be achieved in cost-effective way.

The new addition of the Minister for Manufacturing Awards is a fantastic initiative and we congratulate all the nominees and finalists who have been recognised so far across all categories.

The announcing of the award winners at SouthMach is sure to be a highlight as we celebrate the amazing people and organisations working across our industry.

LMAC have been regulars at SouthMach for many years and we look forward to another great event in 2025.