Small Aussie manufacturers have had a strong start to 2025 in spite of global trade turmoil, an index by inventory software company Unleashed has shown.

In the first quarter of 2025, small to medium Australian manufacturers had their second-best sales quarter in seven years, raking in a healthy $600,000 in average quarterly revenue growth.

Jarrod Adam, Unleashed’s head of product, said the data indicated a sense of robustness among Australian manufacturers in the face of global trade uncertainty.

“As much as it’s been a very positive start to the year from a sales perspective for Australian manufacturers, it’s also been hugely unsettling. Uncertainty is the enemy of good business, which is even more true of a goods maker who often looks at production on a 6-18 month timeline,” Adam said.

“From our conversations with manufacturers, improving revenue has largely been a testament to Aussie resourcefulness, where businesses have taken the moment to seek out new products and markets.”

The index showed that 12 out of 13 manufacturing sectors saw revenue growth in the first quarter of 2025, with the embattled construction industry being the only category that saw a decline in revenue.

Despite the strong start to 2025, the index revealed some signs of trouble ahead for Australian manufacturers amid global trade turmoil.

Purchase orders, which are typically indicative of future revenue, took a nosedive at the start of 2025. In the March quarter, Unleashed found that purchase orders shrank to their lowest quarterly level since 2020, when the economy was battling pandemic lockdowns.

Warehouse managers also cut into their excess stock at the start of 2025 in the face of a depreciating Australian dollar and an uncertain trade outlook.

Excess stock fell from $35,000 at the end of 2024, to $22,000 in the first quarter of 2025, the index found. Adam explained that this was likely a result of manufacturers trying to wait out the global tariff turbulence.

“The cheap Australian dollar in the first quarter certainly loomed large for local manufacturers, who often rely on US-dollar denominated imports to create their products,” he said.

“It’s likely some makers would have looked to eat into their extra inventory to try and wait out the trade storms and currency volatility, before committing to large ongoing purchases.”

As trade barriers threaten the global outlook, domestic industries – such as fashion manufacturing – could see a revival, Unleashed said.

The Australian Fashion Council has announced efforts to reinvest in local clothing and textile manufacturing, and small to medium Australian clothing makers saw an 8 per cent revenue rise at the start of 2025, the index found.

In the past financial year, the local fashion industry was up $1.53 million in average revenue, compared to $1.09 million the financial year prior.

“More than almost any other manufacturing subsector, clothing makers are facing huge downward pressure towards inexpensive offshore production,” Adam said.

“Though our data does skew towards B2B clothing makers, as opposed to the wider Australian high-end fashion industry, the data is clear that local production is starting to pay dividends.”