According to the NAB Quarterly SME Business Survey for Q3 2025, overall conditions for Australian SMEs have strengthened, with SME business conditions increasing by 7 points for the quarter. The manufacturing sector has performed even more strongly, recording an 11-point rise. As we approach the end of the financial year, this improvement provides a welcome uplift in confidence across the sector.
However, it remains important not to become complacent. To position your business for sustained success in 2026, the following four strategic priorities should be considered.
- Strengthen cost control: Consider negotiating fixed-price supplier agreements for essential inputs such as energy and raw materials. Fixed-term arrangements provide greater pricing certainty, reduce exposure to supply-chain volatility in 2026, and support more accurate budgeting and cashflow planning.
- Improve cash collection processes: Timely collection of receivables is critical to maintaining a strong cashflow position. Review and tighten customer payment terms, and offer multiple payment channels to streamline settlement. Tools such as invoice finance and early-payment discounts may further accelerate your cash conversion cycle, stabilising working capital and reducing reliance on short-term borrowings.
- Invest in technology and production efficiency: Strategic investment in automation and modern production equipment can materially improve productivity and reduce cost pressures. Enhanced efficiency can also lower waste and increase capacity, supporting any planned scale-up in 2026.
- Adopt a flexible workforce strategy: With staffing costs continuing to affect margins, alternative workforce models may be beneficial. Engaging specialised contractors for project-based or growth-phase work can provide access to required expertise without the ongoing cost burden associated with permanent employment.
While the outlook for Australian manufacturing is improving, revisiting your strategic plan for the upcoming year will be essential. We encourage you to meet with our team to discuss your 2026 objectives, key concerns and opportunities to refine your strategy.
